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ABOUT
Dollar General Corporation has been delivering value
to shoppers for more than 80 years. Dollar General
helps shoppers Save time. Save money. Every day.®
by off ering products that are frequently used and
replenished, such as food, snacks, health and beauty
aids, cleaning supplies, basic apparel, housewares and
seasonal items at everyday low prices in convenient
neighborhood locations. Dollar General operated
17,177 stores in 46 states as of January 29, 2021.
In addition to high-quality private brands, Dollar
General sells products from America’s most-trusted
manufacturers such as Clorox, Energizer, Procter &
Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle,
Kimberly-Clark, Kellogg’s, General Mills and PepsiCo.
Visit www.dollargeneral.com
to learn more about Dollar General and shop online.
9
65
21
237
11
5
62
125
100
51
63
178
132
285
216
607
603
602
901
252
479
571
472
611
850
42
38
61
52
21
71
162
49
146
522
823
256
444
909
583
828
960
559
586
1,619
938
ANNUAL MEETING
In light of the continuing health impact of the COVID-19
pandemic, Dollar General Corporation’s annual meeting
of shareholders is scheduled to be held in a virtual only
format at 9 a.m. Central Time on Wednesday, May 26,
2021. To attend the annual meeting, please visit the annual
meeting website at:
www.virtualshareholdermeeting.com/DG2021
Shareholders of record as of March 18, 2021 are entitled to
vote at the meeting. Please see the Proxy Statement for
more information on how to attend and vote at the meeting.
NYSE: DG
The common stock of Dollar General Corporation is
traded on the New York Stock Exchange under the
trading symbol “DG.” The number of shareholders of
record as of March 18, 2021 was 2,756.
STOCK PERFORMANCE GRAPH
The graph below compares Dollar General Corporation’s
cumulative total shareholder return on common stock
with the cumulative total returns of the S&P 500 index
and the S&P Retailing index. The graph tracks the
performance of a $100 investment in our common
stock and in each index (with the reinvestment of all
dividends) from January 29, 2016 to January 29, 2021.
COMPARISON OF CUMULATIVE TOTAL RETURN
$300
$250
$200
$150
$100
1/29/16
2/3/17
2/2/18
2/1/19
1/31/20
1/29/21
Dollar General Corporation
S&P 500 Index
S&P Retailing Index
1/29/16
2/3/17
2/2/18
2/1/19
1/31/20
1/29/21
Dollar General
$100
$98.67
$135.96 $159.08
$214.05
$273.57
S&P 500 Index
$100
$120.04 $151.74
$148.23
$180.37
$211.48
S&P Retailing Index
$100
$120.09
$174.49
$186.29
$219.46
$316.05
NET SALES
NET SALES
(IN BILLIONS)
(IN BILLIONS)
$33.7
$27.8
$25.6
$23.5
$22.0
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
ENDING STORE COUNT
ENDING STORE COUNT
17,177
16,278
15,370
14,534
13,320
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
SAME-STORE
SAME-STORE
SALES GROWTH
SALES GROWTH
16.3%
3.9%
3.2%
2.7%
0.9%
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
CASH FROM OPERATIONS
CASH FROM OPERATIONS
(IN MILLIONS)
(IN MILLIONS)
$3,876
$2,238
$2,144
$1,802
$1,605
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
CAUTIONARY DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS & WEBSITE DISCLAIMER: All forward-looking information in this
report should be read with, and is qualifi ed in its entirety by, the Cautionary Disclosure Regarding Forward-Looking Statements and the Risk Factors
disclosures set forth in the Introduction and in Item 1A, respectively, of the Form 10-K included elsewhere in this report. The information contained on
or connected to our Internet website is not incorporated by reference into this report and should not be considered part of this or any other report
that we fi le with or furnish to the SEC, unless we specifi cally provide otherwise.
The stock price performance included in this graph is not
necessarily indicative of future stock price performance.
Fiscal 2016 includes 53 weeks, while all other
years presented contain 52 weeks. Sales in the 2016
53rd week were approximately $399 million.
TO OUR FELLOW SHAREHOLDERS,
CUSTOMERS & EMPLOYEES:
At Dollar General, our mission of Serving Others remains
foundational to everything we do. In a year of unprecedented
challenges due to the COVID-19 pandemic, we took significant
actions to demonstrate our appreciation for the incredible
efforts of our employees, and to further safeguard the well-
being of our team members and customers. These efforts
included awarding approximately $167 million in employee
appreciation bonuses, enhancing benefits and leave policies,
providing safety supplies, dedicating certain store hours for the
most vulnerable members of our communities, and removing
barriers for frontline employees to obtain the vaccine.
As a mature retailer in growth mode, we also made significant
progress in 2020 toward advancing key initiatives to better
serve our customers and drive strong returns for our
shareholders. During the year, we completed 2,780 real estate
projects, including the opening of our 17,000th store and the
launch of our new pOpshelf concept, while also delivering our
31st consecutive year of same-store sales growth. Our hallmark
value and convenience proposition, combined with our unique
and growing real estate footprint, disciplined execution, and
focused innovation, has allowed us to further solidify our
position as a leader in the small-box discount retail channel.
Highlights of 2020 Compared to 2019:
2. Capturing growth opportunities: Our proven high-return,
low-risk real estate growth model, coupled with ongoing
format innovation, has generated a unique footprint of
more than 17,000 stores, resulting in approximately 75%
of the U.S. population living within five miles or less of
one of our stores. In 2021, we plan to open 1,050 new
stores, remodel 1,750 stores and relocate 100 stores
as we continue to expand our ability to serve new and
existing customers. Our Digital initiative complements
our brick-and-mortar presence, as we seek to deploy and
leverage technology to further enhance our customers’ in-
store experience, while providing even more convenient
shopping options, such as DG Pickup.
3. Leveraging and reinforcing our position as a low cost
operator: Our clear and defined process to control
spending continues to drive efficiencies and deliver savings
across the organization. This Save to Serve approach has
resulted in efforts such as “Fast Track,” which is primarily
focused on increasing labor productivity in our stores, as
well as enhancing customer convenience. During 2020,
we introduced self-checkout in more than 1,600 stores,
providing even greater convenience for our customers.
Our plans for 2021
include additional productivity
enhancements across our store base, distribution centers,
and in our store support center.
• Net sales increased 21.6% to $33.7 billion, and same-
store sales increased 16.3%.
4.
• Operating profit increased 54.4% to $3.6 billion.
• Net income grew to $2.7 billion, and diluted earnings
per share increased 59.9% to $10.62.
•
Cash flows from operations were $3.9 billion, an
increase of 73.2%.
We are pleased with our results in 2020, which we believe are
a testament to the exceptional performance of our employees
in a difficult year, as well as the strong fundamentals of the
business, and our commitment to keeping the customer at
the center of everything we do. Notably, we accelerated the
rollout of several strategic initiatives, which have become
important contributors to our business. We expect to
expand these rollouts in 2021 with the goal of continuing to
drive long-term sustainable growth. We approach this goal
through the lens of our four key operating priorities:
1. Driving profitable sales growth: Our robust portfolio
of sales-driving and gross margin-enhancing initiatives
includes our non-consumable initiative (“NCI”) and “DG
Fresh” initiative. In 2020, we expanded NCI to more
than 5,800 stores as we look to enhance the treasure-
hunt experience for our customers. DG Fresh is aimed
at reducing product costs, while driving on-shelf
availability and greater product assortment. At the
conclusion of 2020, we were self-distributing frozen and
refrigerated goods to more than 16,000 stores from 10
facilities. In addition, our efforts included further cooler
door expansion, private brand enhancements, and
distribution and transportation efficiencies. We expect
to expand upon each of these opportunities in 2021.
Investing in our diverse teams through development,
empowerment and
inclusion:
In addition to the
employee appreciation bonuses awarded in 2020, we
continued to invest in the training and development of
our team as we seek to better position them for future
success. We believe our investments are resonating, as
demonstrated by record-low store manager turnover
and strong engagement scores across the organization
in 2020. We believe that the opportunity to start and
develop a career with a growing retailer remains a
strong competitive advantage.
In addition to driving strong operating results, we were
intentional about carrying our mission into the communities we
call home. In 2020, Dollar General and its Foundations awarded
more than $30 million to charitable efforts that extend hope
and opportunity to individuals and nonprofit organizations.
I want to thank each of our more than 157,000 employees
who work hard every day to serve our customers. We are
excited about our plans for 2021, and believe we are well-
positioned to continue delivering value for our customers,
employees and shareholders.
RESPECTFULLY,
TODD J. VASOS
CHIEF EXECUTIVE OFFICER
APRIL 1, 2021
PROXY STATEMENT
& MEETING NOTICE
DEAR FELLOW SHAREHOLDER,
The 2021 Annual Meeting of Shareholders of Dollar General
Corporation will be held on Wednesday, May 26, 2021, at
9:00 a.m., Central Time. All shareholders of record at the close
of business on March 18, 2021 are invited to attend the annual
meeting. This year, in light of the continuing public health
impact of the COVID-19 pandemic, the annual meeting will be
held entirely online. Please see the Notice of Annual Meeting
of Shareholders for more information about how to virtually
attend and participate in the annual meeting.
We thank those of you who met with us over the past year
and provided valuable feedback on broad-ranging topics such
as our response to the COVID-19 pandemic, corporate
governance, Board refreshment and composition,
environmental and social issues, and our executive
compensation program structure. In 2020, we conducted
outreach to shareholders representing more than 58% of
shares outstanding and ultimately engaged with shareholders
comprising 52% of shares outstanding. As Chairman of the
Board and Chairman of the Nominating and Governance
Committee, I led the engagement with shareholders
representing over 25% of shares outstanding. The information
we received during this engagement helped to inform the
Board’s decision to seek shareholder approval of a Charter
amendment, described in Proposal 5 in the Proxy Statement,
to implement a right for shareholders holding in the
aggregate at least 25% of shares outstanding to request
special meetings of shareholders. We are committed to
continuing our dialogue with our shareholders and appreciate
your engagement with us.
Your interest in Dollar General and your vote are very
important to us. Whether or not you plan to attend the annual
meeting, please vote at your earliest convenience.
On behalf of the Board of Directors, thank you for your
continued support of Dollar General.
SINCERELY,
MICHAEL M. CALBERT
CHAIRMAN OF THE BOARD
APRIL 1, 2021
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
DATE
TIME
LOCATION
26
Wednesday
May 26, 2021
9:00 a.m.
Central Time
Entirely online at
www.virtualshareholdermeeting.com/DG2021
(the “Annual Meeting Website”)
ITEMS OF BUSINESS:
• To elect as directors the 8 nominees listed in the Proxy Statement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
To hold an advisory vote to approve our named executive officer compensation as disclosed in the Proxy
Statement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• To ratify the appointment of our independent registered public accounting firm for fiscal 2021
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• To approve the Dollar General Corporation 2021 Stock Incentive Plan
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
To approve an amendment to our amended and restated charter to allow shareholders holding 25% or
more of our common stock to request special meetings of shareholders
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• To vote upon a shareholder proposal, if properly presented at the annual meeting
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
To transact any other business that may properly come before the annual meeting and any adjournments
of that meeting
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WHO MAY VOTE:
Shareholders of record at the close of business on March 18, 2021
HOW TO PARTICIPATE IN THE ANNUAL MEETING:
There will be no physical location for the annual meeting, which will be held entirely online via live webcast
through the Annual Meeting Website due to the continuing public health impact of the COVID-19 pandemic.
To attend the annual meeting, and to vote, examine our list of shareholders and submit your questions during
the annual meeting, visit the Annual Meeting Website and enter your 16-digit control number found on your
Notice of Internet Availability, proxy card or voting instruction form. Shareholders who attend the annual
meeting by following such instructions will be considered to be attending the annual meeting “in person.”
Prior to the annual meeting, you also will be able to vote at www.proxyvote.com and by the other methods
described in the Proxy Statement. We encourage you to vote in advance of the annual meeting even if you
intend to attend the meeting. For more information, please see “Solicitation, Meeting and Voting Information”
beginning on page 1 of the Proxy Statement.
By Order of the Board of Directors,
Goodlettsville, Tennessee
April 1, 2021
Christine L. Connolly
Corporate Secretary
PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in the proxy statement or about Dollar General. This
summary does not contain all of the information that you should consider, and you should review all of the
information contained in the proxy statement before voting.
DOLLAR GENERAL AT-A-GLANCE*
17,000+
STORES
LOW-PRICED PRODUCT MODEL
~22%
OF PRODUCTS
PRICED AT $1 OR LESS
157,000+
EMPLOYEES
at 2020 fiscal year end
$33.7
BILLION
IN SALES
In fiscal
year 2020
$10.62
DILUTED EPS
In fiscal
year 2020
MULTIPLE STORE FORMATS
TO SERVE OUR CUSTOMERS
112 th
RANKING ON THE
FORTUNE 500 LIST
$3.6
BILLION
OPERATING
PROFIT
In fiscal
year 2020
$2.7
BILLION
NET INCOME
In fiscal
year 2020
* Data as of February 26, 2021 unless otherwise noted.
COVID-19 RESPONSE
At Dollar General, our mission of Serving Others remains foundational to everything we do. In a year of
unprecedented challenges due to the COVID-19 pandemic, we took significant actions to demonstrate our
appreciation for the incredible efforts of our employees and to further safeguard the well-being of our team
members and customers. These efforts included awarding approximately $167 million in employee
appreciation bonuses, enhancing benefits and leave policies, providing safety supplies, dedicating certain
store hours for the most vulnerable members of our communities, and removing barriers for frontline
employees to obtain the vaccine.
PROXY STATEMENT SUMMARY
VOTING MATTERS (pp. 1 - 10, 48, 50 and 52 - 67)
2021 PROPOSALS
Proposal 1: Election of Directors
Proposal 2: Advisory Vote to Approve Named Executive Officer
Compensation
Proposal 3: Ratification of Appointment of Auditors
Proposal 4: Vote to Approve 2021 Stock Incentive Plan
Proposal 5: Vote to Approve Charter Amendment to Allow Shareholders
Holding 25% or More of our Common Stock to Request Special
Meetings of Shareholders
Board
Recommendation
For
For
For
For
For
Proposal 6: Shareholder Proposal Regarding Shareholders’ Ability to Call
Special Meetings of Shareholders
Against
HOW TO VOTE (pp. 1 - 2)
MAIL
PHONE
INTERNET
IN PERSON
Complete, sign,
date and mail
your
proxy card or
voting
instruction form
1-800-690-6903 www.proxyvote.com
May 26, 2021
9:00 a.m., CT
On the Annual Meeting
Website
ANNUAL MEETING WEBSITE:
www.virtualshareholdermeeting.com/DG2021
See “Solicitation, Meeting and Voting Information” beginning on page 1
for information on how to participate in the annual meeting.
PROXY STATEMENT SUMMARY
BOARD OF DIRECTORS GROUP DIVERSITY (pp. 5 - 10)
AGE
61
DIRECTOR
AVERAGE
AGE
TENURE
4
6.9
YEARS
AVERAGE
3
1
0-5
6-10
11+
DIVERSITY
(Race & Gender)
37.5%
Blended
Diverse
BOARD OF DIRECTORS COMPOSITION (pp. 6 - 10, 13 - 14 and 18)
Director
Since
(Calendar
Year)
Currently Serving on
Other Public Boards
• Loblaw Companies
Limited
Committee
Memberships
A
C
N
Partnering Corporation
• AutoZone, Inc.
Grill, Inc.
• Keurig Dr Pepper Inc.
• Archer Daniels Midland
Company
• Gannett Co., Inc.
Name and Principal
Occupation
Independent Age
Warren F. Bryant
Retired Chairman, President & CEO,
Longs Drug Stores Corporation
Michael M. Calbert
Chairman,
Dollar General Corporation
Retired Member, KKR & Co. L.P.
Patricia D. Fili-Krushel
Chairperson,
Coqual
Timothy I. McGuire
CEO,
Mobile Service Center Canada, Ltd.
William C. Rhodes, III
Chairman, President & CEO,
AutoZone, Inc.
Debra A. Sandler
President & CEO,
La Grenade Group, LLC
Founder & CEO, Mavis Foods, LLC
Ralph E. Santana
Harman International Industries
Todd J. Vasos
CEO,
Dollar General Corporation
Chair
Member
A
Audit
C
Compensation
N
Nominating and Governance
PROXY STATEMENT SUMMARY
PAY FOR PERFORMANCE (pp. 20 - 30)
The primary elements of our executive compensation program are summarized in the chart below and reflect
a significant alignment with our shareholders’ interests.
Pay Element
Vehicle
2020 Metrics
Base Salary
Cash
Reflects comparable positions in the
competitive marketplace, recognizing
performance, responsibilities and experience
Short-Term
Incentive
Long-Term
Incentive
Cash
Adjusted EBIT (100%)
Options (50%)
Vest 25% annually
over 4 years
Stock price
PSUs (50%)
3-year ratable vest
1-Year Adjusted EBITDA (50%)
3-Year Adjusted ROIC (50%)
Consistent with our philosophy,
and as illustrated to the right, a
significant portion of annualized
total target compensation for
our named executive officers in
2020 was variable/at-risk as a
result of being either
performance-based, linked to
changes in our stock price, or
both.
CEO
STI
16%
OTHER NEOs
(Averaged)
STI
19%
Salary
11%
89%
VARIABLE/
AT-RISK
LTI
73%
76%
VARIABLE/
AT-RISK
Salary
24%
LTI
57%
LTI — Long-Term Equity Incentive (stock options and performance share units)
STI — Short-Term Cash Incentive (Teamshare bonus program)
92.5%
SHAREHOLDER
SUPPORT
The most recent shareholder advisory vote on our named
executive officer compensation was held on May 27,
2020. Excluding abstentions and broker non-votes, 92.5%
of total votes were cast in support of the program.
PROXY STATEMENT SUMMARY
SHAREHOLDER ENGAGEMENT (p. 11)
Our Board of Directors appreciates and proactively seeks the viewpoints of our shareholders. Our focused
outreach in the fall of 2020 encompassed a broad base of shareholders and discussion topics and helped
inform the Board’s decision to recommend the Charter amendment described in Proposal 5 to implement a
shareholder special meeting right.
INVITED
shareholders representing
>58%
of shares outstanding
ENGAGED
shareholders representing
52%
of shares outstanding
CHAIRMAN
LED
engagement with
shareholders representing
>25%
of shares outstanding
SERVING OTHERS
Our mission of Serving Others is the foundation on which our business was built, continues to operate today
and serves as a guiding force to support the Company's future.
To Serve…Our Customers
We work to improve our customers’ lives. We do so by
providing quality goods at low prices in convenient
loca(cid:2)ons and formats and trea(cid:2)ng each customer with
respect and dignity.
To Serve…Each Other
Our commitment to teamwork is more than just words
on a page. We treat each other with fairness and respect,
valuing our differences, and taking into account how our
ac(cid:2)ons might affect others.
To Serve…Our Communi(cid:2)es
We seek to be good corporate ci(cid:2)zens in the communi(cid:2)es
where we do business, whether through grants provided
by our Literacy Founda(cid:2)on, corporate giving in (cid:2)mes of
need or ac(cid:2)ng as good stewards of our environment.
To Serve…Our Shareholders
Our shareholders have invested not only in Dollar General,
but also in each of us. We protect this investment by
protec(cid:2)ng Company assets and maintaining our reputa(cid:2)on
for quality products and services at everyday low prices.
TABLE OF CONTENTS
SOLICITATION, MEETING AND VOTING
INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPOSAL 1:
Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
5
CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . .
11
DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . .
16
DIRECTOR INDEPENDENCE . . . . . . . . . . . . . . . . . . . .
18
TRANSACTIONS WITH MANAGEMENT AND
OTHERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . .
Compensation Discussion and Analysis . . . .
Compensation Committee Report . . . . . . . . .
Summary Compensation Table . . . . . . . . . . . . .
Grants of Plan-Based Awards in Fiscal
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding Equity Awards at 2020 Fiscal
Year-End . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Option Exercises and Stock Vested During
Fiscal 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension Benefits Fiscal 2020 . . . . . . . . . . . . . . .
Nonqualified Deferred Compensation
Fiscal 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Potential Payments upon Termination or
Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Committee Interlocks and
Insider Participation . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Risk Considerations . . . . . . . .
Pay Ratio Disclosure . . . . . . . . . . . . . . . . . . . . . . . .
19
20
20
30
31
33
34
36
36
36
37
45
45
45
Security Ownership of Officers and
Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47
PROPOSAL 2:
Advisory Vote to Approve Named Executive
Officer Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
AUDIT COMMITTEE REPORT . . . . . . . . . . . . . . . . . . .
49
PROPOSAL 3:
Ratification of Appointment of Auditors . . . . . .
50
FEES PAID TO AUDITORS . . . . . . . . . . . . . . . . . . . . . .
51
PROPOSAL 4:
Vote to Approve the 2021 Stock Incentive
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
PROPOSAL 5:
Vote to Approve Charter Amendment to
Allow Shareholders Holding 25% of our
Common Stock to Request Special Meetings
of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPOSAL 6:
Shareholder Proposal Regarding
Shareholders’ Ability to Call Special Meetings
of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SHAREHOLDER PROPOSALS FOR 2022
ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62
65
68
APPENDIX A:
2021 Stock Incentive Plan . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B:
Amendment to the Amended and Restated
Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
SECURITY OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . .
46
Security Ownership of Certain Beneficial
Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46
APPENDIX C:
Amendments to the Amended and Restated
Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER
MEETING TO BE HELD ON MAY 26, 2021
This Proxy Statement, our 2020 Annual Report and a form of proxy card are available at www.proxyvote.com. You will
need your Notice of Internet Availability or proxy card to access the proxy materials.
As permitted by rules adopted by the Securities and Exchange Commission (“SEC”), we are furnishing our proxy materials
over the Internet to some of our shareholders. This means that some shareholders will not receive paper copies of these
documents but instead will receive only a Notice of Internet Availability containing instructions on how to access the
proxy materials over the Internet and how to request a paper copy of our proxy materials, including the Proxy Statement,
our 2020 Annual Report, and a proxy card. Shareholders who do not receive a Notice of Internet Availability will receive a
paper copy of the proxy materials by mail, unless they have previously requested delivery of proxy materials electronically.
PROXY STATEMENT
This document is the proxy statement of Dollar General Corporation that we use to solicit your proxy to vote upon
certain matters at our Annual Meeting of Shareholders to be held on Wednesday, May 26, 2021, which is being held
entirely online at www.virtualshareholdermeeting.com/DG2021 (the “Annual Meeting Website”) due to the
continuing public health impact of the COVID-19 pandemic. We will begin mailing to shareholders printed copies of
this document and the form of proxy or the Notice of Internet Availability on or about April 1, 2021.
ANNUAL MEETING WEBSITE:
www.virtualshareholdermeeting.com/DG2021
SOLICITATION, MEETING AND VOTING INFORMATION
What is Dollar General Corporation and
where is it located?
Dollar General (NYSE: DG) has been delivering value to
shoppers for more than 80 years through its mission of
Serving Others. Dollar General helps shoppers Save
time. Save money. Every day!® by offering products that
are frequently used and replenished, such as food,
snacks, health and beauty aids, cleaning supplies, basic
apparel, housewares and seasonal items at everyday
low prices in convenient neighborhood locations. Dollar
General operated 17,266 stores in 46 states as of
February 26, 2021. Our principal executive offices are
located at 100 Mission Ridge, Goodlettsville,
Tennessee 37072.
We refer to our company as “we,” “us” or “Dollar
General.” Unless otherwise noted or required by
context, “2021,” “2020,” “2019,” and “2018” refer to our
fiscal years ending or ended January 28, 2022,
January 29, 2021, January 31, 2020, and February 1,
2019, respectively.
What is a proxy, who is asking for it, and
who is paying for the cost to solicit it?
A proxy is your legal designation of another person,
called a “proxy,” to vote your stock. The document
designating someone as a proxy is also called a proxy
or a proxy card.
Our directors, officers and employees are soliciting
your proxy on behalf of our Board of Directors and will
not be specially paid for doing so. Solicitation of
proxies by mail may be supplemented by telephone,
email and other electronic means, advertisements,
personal solicitation, news releases issued by Dollar
General, postings on our website, or otherwise. Dollar
General will pay all expenses of this solicitation. We
have retained Innisfree M&A Incorporated to act as a
proxy solicitor for a fee estimated to be $17,500, plus
reimbursement of out of pocket expenses.
What is a Control Number?
To attend and participate in the meeting online, you will
need your “Control Number.” The Control Number is a
16-digit number that you can find in the Notice of
Internet Availability or the proxy card (in each case if
you are a shareholder of record), as applicable, or in the
voting instruction form (if you are a street name
holder).
How may I attend the annual meeting?
Due to the continuing public health impact of the
COVID-19 pandemic, the annual meeting is being held
entirely online via the Annual Meeting Website. Only
shareholders as of March 18, 2021 (the “Record Date”)
may vote on matters to be considered at the annual
meeting, view the list of shareholders as of the Record
Date or submit a question during the annual meeting.
To attend the meeting, please visit the Annual Meeting
Website and enter your Control Number. If you do not
have your Control Number, you may still attend the
meeting by visiting the Annual Meeting Website and
registering as a guest, but you will not be able to vote
your shares, examine our list of shareholders or submit
questions during the meeting.
You may log into the Annual Meeting Website
beginning at 8:45 a.m. Central Time on May 26, 2021,
and the meeting will begin promptly at 9:00 a.m.
Central Time. If you experience any technical difficulties
logging into the Annual Meeting Website or at any time
during the meeting, please call the toll free technical
support number, which will be posted on the Annual
Meeting Website. Technical support will be available
beginning at 8:45 a.m. Central Time on May 26, 2021
and will remain available until the meeting has ended.
2021 Proxy Statement
1
SOLICITATION, MEETING AND VOTING INFORMATION
Who is entitled to vote at the annual
meeting?
You may vote if you owned shares of Dollar General
common stock at the close of business on the Record
Date (March 18, 2021). As of that date, there were
239,264,252 shares of Dollar General common stock
outstanding and entitled to vote. Each share is entitled
to one vote on each matter.
What am I voting on?
You will be asked to vote on:
• the election of the 8 nominees listed in this proxy
statement (Proposal 1);
• the approval on an advisory basis of our named
executive officer compensation as disclosed in this
proxy statement (Proposal 2);
• the ratification of the appointment of our
independent registered public accounting firm (the
“independent auditor”) for 2021 (Proposal 3);
• the approval of the Dollar General Corporation 2021
Stock Incentive Plan (the “2021 Stock Incentive
Plan”) (Proposal 4);
• the approval of an amendment to our amended and
restated charter (our “Charter”) to allow shareholders
holding at least 25% of our common stock to request
special meetings of shareholders (Proposal 5); and
envelope. Please refer to the Notice of Internet
Availability or proxy card, as applicable, for the
telephone number, Internet address and other
instructions. Alternatively, you may vote your shares
electronically at the annual meeting by visiting the
Annual Meeting Website and entering your Control
Number. Once past the login screen, click the “Voting”
button. Even if you plan to attend the meeting, we
recommend that you vote in advance so that your vote
will be counted if you later decide not to attend the
meeting.
If you are a street name holder, your broker, trustee,
bank or other nominee will provide materials and
instructions for voting your shares. You also may vote
your shares electronically at the meeting by visiting the
Annual Meeting Website and entering your Control
Number. Once past the login screen, click the “Voting”
button.
What is the difference between a
“shareholder of record” and a “street name”
holder?
You are a “shareholder of record” if your shares are
registered directly in your name with EQ Shareowner
Services, our transfer agent. You are a “street name”
holder if your shares are held in the name of a
brokerage firm, bank, trust or other nominee as
custodian.
• the shareholder proposal as described in this proxy
statement (Proposal 6).
What if I receive more than one Notice of
Internet Availability or proxy card?
We are unaware of other matters to be acted upon at
the annual meeting. Under Tennessee law and our
governing documents, no other non-procedural
business may be raised at the meeting unless proper
notice has been given to shareholders.
How many votes must be present to hold
the annual meeting?
A quorum, consisting of the presence in person or by
proxy of the holders of a majority of shares of our
common stock outstanding on the Record Date, must
exist to conduct business at the annual meeting. If a
quorum is not present, the presiding officer at the
meeting may adjourn the meeting from time to time
until a quorum is present.
How do I vote?
If you are a shareholder of record, you may vote your
proxy over the telephone or Internet or, if you received
printed proxy materials, by marking, signing, dating and
returning the printed proxy card in the enclosed
You will receive multiple Notices of Internet Availability
or proxy cards if you hold shares in different ways (e.g.,
joint tenancy, trusts, custodial accounts, etc.) or in
multiple accounts. Street name holders will receive the
Notice of Internet Availability or proxy card or other
voting information, along with voting instructions, from
their brokers. Please vote the shares represented by
each Notice of Internet Availability or proxy card you
receive to ensure that all your shares are voted.
How will my proxy be voted?
The persons named on the proxy card will vote your
proxy as you direct. If you return a signed proxy card or
complete the Internet or telephone voting procedures
but do not specify how you want to vote your shares,
the persons named on the proxy card will vote your
shares in accordance with the recommendations of our
Board of Directors. If business other than that
described in this proxy statement is properly raised,
your proxies have authority to vote as they think best,
including to adjourn the meeting.
2
2021 Proxy Statement
Can I change my mind and revoke my
proxy?
How many votes are needed to approve
other matters?
SOLICITATION, MEETING AND VOTING INFORMATION
Yes. A shareholder of record may revoke a proxy given
pursuant to this solicitation by:
• signing a valid, later-dated proxy card and submitting
it so that it is received before the annual meeting in
accordance with the instructions included in the
proxy card;
• before the annual meeting, signing a written notice of
revocation dated later than the date of the proxy and
submitting it to our Corporate Secretary so that it is
received before the annual meeting;
• submitting a later-dated vote by telephone or
Internet no later than 11:59 p.m. Eastern Time on
May 25, 2021; or
• attending the annual meeting and voting in person.
Note that attendance at the annual meeting, by itself,
will not revoke your proxy.
A street name holder may revoke a proxy given
pursuant to this solicitation by following the
instructions of the bank, broker, trustee or other
nominee who holds his or her shares.
How many votes are needed to elect
directors?
To be elected at the annual meeting, a nominee must
receive the affirmative vote of a majority of votes cast
by holders of shares entitled to vote at the meeting.
Under our Charter, the “affirmative vote of a majority of
votes cast” means that the number of votes cast in
favor of a nominee’s election exceeds the number of
votes cast against his or her election. You may vote in
favor of or against the election of each nominee, or you
may elect to abstain from voting your shares.
What happens if a director fails to receive
the required vote for election?
An incumbent director who does not receive the
required vote for election at the annual meeting must
promptly tender a resignation as a director for
consideration by our Board of Directors pursuant to
our Board-approved director resignation policy. Each
director standing for election at the annual meeting has
agreed to resign, effective upon the Board’s
acceptance of such resignation, if he or she does not
receive a majority vote. If the Board rejects the offered
resignation, the director will continue to serve until the
next annual shareholders’ meeting and until his or her
successor is duly elected or his or her earlier
resignation or removal in accordance with our Bylaws.
If the Board accepts the offered resignation, the Board,
in its sole discretion, may fill the resulting vacancy or
decrease the Board’s size.
Proposal 2 (to approve on an advisory basis our named
executive officer compensation), Proposal 3 (to ratify
the appointment of our independent auditor for 2021),
Proposal 4 (to approve the 2021 Stock Incentive Plan)
and Proposal 6 (to approve the shareholder proposal
described in this proxy statement) will be approved if
the votes cast in favor of the applicable proposal
exceed the votes cast against it. With respect to
Proposal 4, abstentions will be counted as votes cast
against the proposal as required by New York Stock
Exchange (“NYSE”) rules. The vote on the
compensation of our named executive officers is
advisory and, therefore, not binding on Dollar General,
our Board of Directors, or its Compensation
Committee.
Proposal 5 (to approve the amendment to our Charter
to allow certain shareholders to request special
meetings of shareholders) will be approved if it
receives the affirmative vote of holders of at least a
majority of the voting power of all outstanding shares
entitled to vote generally in the election of directors.
With respect to each of these proposals, and any other
matter properly brought before the annual meeting,
you may vote in favor of or against the proposal, or you
may elect to abstain from voting your shares.
How will abstentions and broker non-votes
be treated?
Abstentions and broker non-votes will be treated as
shares that are present and entitled to vote for
purposes of determining whether a quorum is present
but, except as provided in the next sentence, will not be
counted as votes cast either in favor of or against a
particular proposal and will have no effect on the
outcome of the particular proposal. However, with
regard to Proposal 4, abstentions (but not broker
non-votes) will be considered votes cast under the
rules of the NYSE and will have the effect of a vote
against Proposal 4, and with regard to Proposal 5,
abstentions and broker non-votes will have the effect
of votes against the proposal.
What are broker non-votes?
Although your broker is the record holder of any shares
that you hold in street name, it must vote those shares
pursuant to your instructions. If you do not provide
instructions, your broker may exercise discretionary
voting power over your shares for “routine” items but
not for “non-routine” items. All matters described in
this proxy statement, except for the ratification of the
appointment of our independent auditor, are
considered to be non-routine matters.
2021 Proxy Statement
3
SOLICITATION, MEETING AND VOTING INFORMATION
“Broker non-votes” occur when shares held of record
by a broker are not voted on a matter because the
beneficial owner has not provided voting instructions
and the broker either lacks or declines to exercise the
authority to vote the shares in its discretion.
How can I ask questions or view the list of
shareholders entitled to vote at the annual
meeting?
You may submit pertinent questions in advance of the
annual meeting beginning on May 12, 2021 by visiting
www.proxyvote.com and entering your Control
Number. Once past the login screen, click on “Question
for Management,” type in the question, and click
“Submit.” You also may submit questions during the
meeting by visiting the Annual Meeting Website and
entering your Control Number. Once past the login
screen, click the “Q&A” button, type the question into
the “submit a question” field and click “Submit.” Rules
of Conduct for the meeting, including rules pertaining
to submission of questions, will be posted on the
Annual Meeting Website and may be accessed once
past the login screen by clicking the “Materials” button.
If there are pertinent questions that cannot be
answered during the meeting due to time constraints,
management will post answers to a representative set
of such questions (e.g., consolidating repetitive
questions) on https://investor.dollargeneral.com under
“News and Events—Events and Presentations” as soon
as practicable after the meeting.
During the annual meeting, shareholders of record may
examine the list of shareholders entitled to vote at the
meeting by visiting the Annual Meeting Website and
entering their Control Number. Once past the login
screen, click the “Materials” button, followed by the
“Registered Shareholder List,” and complete the
required attestation form to view the list. To inspect
such shareholder list prior to the annual meeting,
please contact our Investor Relations department at
615-855-5529 or investorrelations@dollargeneral.com.
Will a recording of the annual meeting be
available after the meeting?
Yes. Within 24 hours following the annual meeting, a
recording of the meeting, including any question and
answer session, will be available on https://
investor.dollargeneral.com under “News and Events—
Events and Presentations” for at least 30 days. The
information on our website, however, is not
incorporated by reference into, and does not form a
part of, this proxy statement.
4
2021 Proxy Statement
PROPOSAL 1: Election of Directors
What is the structure of the Board of
Directors?
Our Board of Directors must consist of 1 to 15
directors, with the exact number set by the Board. The
Board size is currently fixed at 8. All directors are
elected annually by our shareholders.
How are directors identified and nominated?
The Nominating and Governance Committee (the
“Nominating Committee”) is responsible for identifying,
evaluating and recommending director candidates,
including the slate to be presented to shareholders for
election at the annual meeting, to our Board of
Directors, which makes the ultimate election or
nomination determination, as applicable. The
Nominating Committee may use a variety of methods
to identify potential director candidates, such as
recommendations by our directors, management,
shareholders or third-party search firms (see “Can
shareholders recommend or nominate directors?”
below). When a third party search firm is used, the
Nominating Committee expects the search firm to
present a diverse candidate pool pursuant to the
Board’s diversity policy discussed below.
Does the Board consider diversity when
identifying director nominees?
Yes. We have a written policy to endeavor to achieve a
mix of Board members that represents a diversity of
background and experience in areas that are relevant
to our business. To implement this policy, the
Nominating Committee considers each candidate’s
individual qualifications in the context of how that
candidate would relate to the Board as a whole and is
intentional about including in the candidate pool
persons with diverse attributes such as gender, race
and age. The Committee periodically assesses this
policy’s effectiveness as part of its annual
self-evaluation. The matrix included below illustrates
the diverse experience and composition of our Board.
Board of Directors Experience and Composition Matrix
Bry a nt
C alb ert
Fili-K rush el
M c G uire
R h o d es
S a n dler
S a nta n a
V aso s
T otal
Skills and Experience
Retail Industry Experience
Senior Leadership (C-Suite) Experience
Strategic Planning/M&A Experience
Other Public Board Service (current or former)
Financial Expertise or Experience
General Independence
Global/International Experience
(Sourcing or Operations)
Branding/Marketing/Consumer Behavior Experience
Human Capital Experience
E-commerce/Digital/Technology Experience
Risk Management Experience
Racially Diverse
Female
Born Outside the U.S.
Diverse Composition
2021 Proxy Statement
5
PROPOSAL 1: ELECTION OF DIRECTORS
How are nominees evaluated; what are the
threshold qualifications?
The Nominating Committee is charged with
recommending to our Board of Directors only those
candidates that it believes are qualified to serve as
Board members consistent with the director selection
criteria established by the Board and who have not
reached the age of 76, unless the Board has approved
an exception to this limit on a case by case basis. If a
waiver is granted, it will be reviewed annually.
The Nominating Committee assesses a candidate’s
independence, background, experience, and time
commitments, as well as our Board’s skill needs. With
respect to incumbent directors, the Committee also
assesses the meeting attendance record and suitability
for continued service. The Committee determines
whether each nominee is in a position to devote
adequate time to the effective performance of director
duties and possesses the following threshold
characteristics: integrity and accountability, informed
judgment, financial literacy, a cooperative approach, a
record of achievement, loyalty, and the ability to
consult with and advise management. The Committee
recommends candidates, including those submitted by
shareholders, only if it believes a candidate’s
knowledge, experience and expertise would strengthen
the Board and that the candidate is committed to
representing our shareholders’ long-term interests.
Who are the nominees this year?
All nominees for election as directors at the annual
meeting, consisting of the 8 incumbent directors who
were elected at the 2020 annual meeting of
shareholders, were nominated by the Board of
Directors for election by shareholders at the annual
meeting upon the recommendation of the Nominating
Committee. Our Board believes that each of the
nominees can devote an adequate amount of time to
the effective performance of director duties and
possesses all of the threshold qualifications identified
above.
If elected, each nominee would hold office until the
2022 annual meeting of shareholders and until his or
her successor is elected and qualified, subject to any
earlier resignation or removal.
The following lists the nominees, their ages at the date
of this proxy statement and the calendar year in which
they first became a director, along with their
biographies and the experience, qualifications,
attributes or skills that led the Board to conclude that
each nominee should serve as a director of Dollar
General.
Biography:
Mr. Bryant served as the President and Chief Executive Officer of Longs Drug Stores
Corporation from 2002 through 2008 and as its Chairman of the Board from 2003 through
his retirement in 2008. Prior to joining Longs Drug Stores, he served as a Senior Vice
President of The Kroger Co. from 1999 to 2002. Mr. Bryant has served as a director of Loblaw
Companies Limited since May 2013 and served as a director of OfficeMax Incorporated from
2004 to 2013 and Office Depot, Inc. from November 2013 to July 2017.
WARREN
F. BRYANT
Age: 75
Director Since:
2009
Specific Experience, Qualifications, Attributes, and Skills:
Mr. Bryant has over 40 years of retail experience, including experience in marketing,
merchandising, operations, and finance. His substantial experience in leadership and policy-
making roles at other retail companies, together with his current and former experience as a
board member for other retailers, provides him with an extensive understanding of our
industry, as well as with valuable executive management skills, global, strategic planning, and
risk management experience, and the ability to effectively advise our CEO.
6
2021 Proxy Statement
MICHAEL
M. CALBERT
Age: 58
Director Since:
2007
PROPOSAL 1: ELECTION OF DIRECTORS
Biography:
Mr. Calbert has served as our Chairman of the Board since January 2016. He joined the
private equity firm KKR & Co. L.P. in January 2000 and was directly involved with several KKR
portfolio companies until his retirement in January 2014, after which he served as a
consultant to KKR until June 2015. Mr. Calbert led KKR’s Retail industry team prior to his
retirement. He also served as the Chief Financial Officer of Randall’s Food Markets from 1997
until it was sold in September 1999 and worked as a certified public accountant and
consultant with Arthur Andersen Worldwide from 1985 to 1994, where his primary focus was
the retail and consumer industry. Mr. Calbert has served as a director of Executive Network
Partnering Corporation since September 2020 and AutoZone, Inc. since May 2019. He
previously served as our Chairman of the Board from July 2007 until December 2008 and as
our lead director from March 2013 until his re-appointment as our Chairman of the Board in
January 2016.
Specific Experience, Qualifications, Attributes, and Skills:
Mr. Calbert has considerable experience in managing private equity portfolio companies and
is experienced with corporate finance and strategic business planning activities. As the
former head of KKR’s global retail industry team, Mr. Calbert has a strong background and
extensive experience in advising and managing companies in the retail industry, including
evaluating business strategies and operations, financial plans and structures, risk, and
management teams. His former service on various private company boards in the retail
industry, as well as his current service on the board of another public retail company, further
strengthens his knowledge and experience within our industry. Mr. Calbert also has a
significant financial and accounting background evidenced by his prior experience as the
chief financial officer of a retail company and his 10 years of practice as a certified public
accountant.
.........................................................................................................................................................................
PATRICIA
D. FILI-KRUSHEL
Age: 67
Director Since:
2012
Biography:
Ms. Fili-Krushel has served as Chairperson of the Board of Coqual, a non-profit think tank
that focuses on global talent strategies, since February 2021. Prior thereto, she served as
Coqual’s Chief Executive Officer from September 2018 until January 2021. She previously
was Executive Vice President (April 2015 to November 2015) of NBCUniversal, serving as a
strategist and key advisor to the CEO; Chairman of NBCUniversal News Group (July 2012 to
April 2015); and Executive Vice President of NBCUniversal (January 2011 to July 2012)
overseeing the operations and technical services, business strategy, human resources and
legal functions. She was Executive Vice President of Administration at Time Warner Inc.
(July 2001 to December 2010) overseeing philanthropy, corporate social responsibility,
human resources, worldwide recruitment, employee development and growth, compensation
and benefits, and security; Chief Executive Officer of WebMD Health Corp. (April 2000 to
July 2001); and President of ABC Television Network (July 1998 to April 2000). Ms. Fili-
Krushel has served as a director of Chipotle Mexican Grill, Inc. since March 2019.
Specific Experience, Qualifications, Attributes, and Skills:
Ms. Fili-Krushel’s background increases the breadth of experience of our Board as a result of
her extensive executive experience overseeing the business strategy, philanthropy, corporate
social responsibility, human resources, recruitment, employee growth and development,
compensation and benefits, and legal functions, along with associated risks, at large public
companies in the media industry. She also brings valuable oversight experience in diversity-
related workplace matters from her positions at Coqual, as well as digital and e-commerce
experience gained while serving as CEO of WebMD Health Corp. In addition, her
understanding of consumer behavior based on her knowledge of viewership patterns and
preferences provides a different perspective to our Board in understanding our customer
base, and her other public company board experience brings additional perspective to our
Board.
2021 Proxy Statement
7
PROPOSAL 1: ELECTION OF DIRECTORS
TIMOTHY
I. MCGUIRE
Age: 60
Director Since:
2018
Biography:
Mr. McGuire has served as Chief Executive Officer of Mobile Service Center Canada, Ltd.
(d/b/a Mobile Klinik and, since July 2020, a business division of TELUS Corporation), a chain
of professional smartphone repair stores, since October 2018 and as its Chairman of the
Board (June 2017 to October 2018) and director (March 2017 to July 2020). He retired from
McKinsey & Company, a worldwide management consulting firm, in August 2017 after
serving as a leader of its global retail and consumer practice for almost 28 years, including
leading the Americas retail practice for five years. While at McKinsey, Mr. McGuire led
consulting efforts with major retail, telecommunications, consumer service, and marketing
organizations in Canada, the United States, Latin America, Europe, and Australia. He also
co-founded McKinsey Analytics, a global group of consultants bringing advanced analytics
capabilities to clients to help make better business decisions. Mr. McGuire also held various
positions with Procter & Gamble (1983 to 1989), including Marketing Director for the
Canadian Food & Beverage division.
Specific Experience, Qualifications, Attributes, and Skills:
Mr. McGuire brings over 30 years of valuable retail experience to our company, recently as
Chief Executive Officer of Mobile Klinik and having served as a leader of McKinsey’s global
retail and consumer practice for almost 28 years. He has expertise in strategy, new store/
concept development, marketing and sales, operations, international expansion, big data and
advanced analytics, as well as risk management experience. In addition, Mr. McGuire’s focus
while at McKinsey on use of advanced analytics in retail, developing and implementing
growth strategies for consumer services, food, general-merchandise and multi-channel
retailers, developing new retail formats, the application of lean operations techniques, the
redesign of merchandise flows, supply-chain optimization efforts, and the redesign of
purchasing and supplier-management approaches, brings extensive relevant perspectives to
our Board as it seeks to consult and advise our CEO and to shape our corporate strategy.
.........................................................................................................................................................................
Biography:
Mr. Rhodes was named Chairman of AutoZone, Inc., a specialty retailer and distributor of
automotive replacement parts and accessories, in June 2007 and has served as its President
and Chief Executive Officer and a director since 2005. He also previously held various other
key management positions with AutoZone since joining the company in 1994. Prior to 1994,
Mr. Rhodes was a manager with Ernst & Young LLP.
Specific Experience, Qualifications, Attributes, and Skills:
Mr. Rhodes has over 25 years of experience in the retail industry, including extensive
experience in operations, supply chain, and finance, among other areas. This background
serves as a strong foundation for offering invaluable perspective and expertise to our CEO
and our Board. In addition, his experience as a board chairman and chief executive officer of
a public retail company provides leadership, consensus-building, strategic planning, and
budgeting skills, as well as international experience and an extensive understanding of both
short- and long-term issues confronting the retail industry. Mr. Rhodes also has a strong
financial background, and our Board has determined that he qualifies as an audit committee
financial expert.
WILLIAM
C. RHODES, III
Age: 55
Director Since:
2009
8
2021 Proxy Statement
DEBRA
A. SANDLER
Age: 61
Director Since:
2020
PROPOSAL 1: ELECTION OF DIRECTORS
Biography:
Ms. Sandler has served as President and Chief Executive Officer of La Grenade Group, LLC, a
marketing consultancy that serves packaged goods companies operating in the health and
wellness space, since September 2015. She also has served as Chief Executive Officer of
Mavis Foods, LLC, a startup she founded that makes and sells Caribbean sauces and
marinades, since April 2018. Ms. Sandler previously served seven years with Mars, Inc.,
including Chief Health and Wellbeing Officer (July 2014 to July 2015); President, Chocolate
North America (April 2012 to July 2014); and Chief Consumer Officer, Chocolate
(November 2009 to March 2012). She also held senior leadership positions with Johnson &
Johnson from 1999 to 2009, where her last position was Worldwide President for McNeil
Nutritionals LLC, a fully integrated business unit within the Johnson & Johnson Consumer
Group of Companies. She began her career in 1985 with PepsiCo, Inc., where she served for
13 years in a variety of marketing positions of increasing responsibility. Ms. Sandler has
served as a director of Keurig Dr Pepper Inc. since March 2021, Archer Daniels Midland
Company since May 2016 and Gannett Co., Inc. since June 2015.
Specific Experience, Qualifications, Attributes, and Skills:
Ms. Sandler has strong marketing and operating experience and a proven record of creating,
building, enhancing, and leading well-known consumer brands as a result of the leadership
positions she has held with Mars, Johnson & Johnson, and PepsiCo. These positions have
required an extensive understanding of consumer behavior and the evolving retail
environment. In addition, her launch of Mavis Foods has provided her with valuable
e-commerce and strategic planning experience, and her other public company board
experience brings additional perspective to our Board.
.........................................................................................................................................................................
RALPH
E. SANTANA
Age: 53
Director Since:
2018
Biography:
Mr. Santana has served as Executive Vice President and Chief Marketing Officer of Harman
International Industries, a wholly-owned subsidiary of Samsung Electronics Co., Ltd., since
April 2013, with responsibility for Harman’s worldwide marketing strategy and global design
group. Mr. Santana previously served as Senior Vice President and Chief Marketing Officer of
Samsung Electronics North America (June 2010 to September 2012), where he was
responsible for launching Samsung’s U.S. e-commerce business. He also served 16 years at
PepsiCo, Inc. (June 1994 to May 2010) in multiple international and domestic leadership roles
in marketing, including Vice President of Marketing, North American Beverages, Pepsi-Cola,
and held positions with its Frito-Lay’s international and North America operations.
Mr. Santana began his career at Beverage Marketing Corporation (July 1989 to June 1992)
where he served as a beverage industry consultant designing market entry and expansion
strategies.
Specific Experience, Qualifications, Attributes, and Skills:
Mr. Santana has over 25 years of marketing experience spanning multiple technology and
food and beverage consumer packaged goods categories. His deep understanding of digital
marketing and retail shopper marketing, particularly in the area of consumer packaged
goods, and his extensive experience in shaping multi-cultural strategy, executing marketing
programs, and making brands culturally relevant further enhances our Board’s ability to
provide oversight and thoughtful counsel to management in these important and evolving
areas of our business. His executive position also provides risk management experience.
2021 Proxy Statement
9
PROPOSAL 1: ELECTION OF DIRECTORS
TODD
J. VASOS
Age: 59
Director Since:
2015
Biography:
Mr. Vasos has served as Chief Executive Officer and a member of our Board since June 2015.
He joined Dollar General in December 2008 as Executive Vice President, Division President
and Chief Merchandising Officer and was promoted to Chief Operating Officer in
November 2013. Prior to joining Dollar General, Mr. Vasos served in executive positions with
Longs Drug Stores Corporation for seven years, including Executive Vice President and Chief
Operating Officer (February 2008 to November 2008) and Senior Vice President and Chief
Merchandising Officer (2001 to 2008), where he was responsible for all pharmacy and
front-end marketing, merchandising, procurement, supply chain, advertising, store
development, store layout and space allocation, and the operation of three distribution
centers. He also previously served in leadership positions at Phar-Mor Food and Drug Inc.
and Eckerd Corporation. Mr. Vasos has served as a director of KeyCorp since July 2020.
Specific Experience, Qualifications, Attributes, and Skills:
Mr. Vasos has extensive retail experience, including over 10 years with Dollar General. He has
a thorough understanding of all key areas of our business, which is further bolstered by his
former experience overseeing the merchandising, operations, marketing, advertising, global
procurement, supply chain, store development, store layout and space allocation functions of
other retail companies. In addition, Mr. Vasos’s service in leadership and policy-making
positions in the retail business has provided him with the necessary leadership skills to
effectively guide and oversee the direction of Dollar General and with the consensus-building
skills required to lead our management team, and his other public company board
experience brings additional perspective to his leadership of Dollar General.
Can shareholders recommend or nominate
directors?
Yes. Shareholders may recommend candidates to our
Nominating Committee by providing the same
information within the same deadlines required for
nominating candidates pursuant to the advance notice
provisions in our Bylaws. Our Nominating Committee is
required to consider such candidates and to apply the
same evaluation criteria to them as it applies to other
director candidates. Shareholders also can go a step
further and nominate directors for election by
shareholders by following the advance notice
procedures in our Bylaws.
Whether recommending a candidate for our
Nominating Committee’s consideration or nominating a
director for election by shareholders, you must submit
a written notice for receipt by our Corporate Secretary
at the address and within the deadlines disclosed under
“Shareholder Proposals for 2022 Annual Meeting.” The
notice must contain all information required by our
Bylaws about the shareholder proposing the nominee
and about the nominee.
We also have a “proxy access” provision in our Bylaws
which allows eligible shareholders to nominate
candidates for election to our Board and include such
candidates in our proxy statement and ballot subject to
the terms, conditions, procedures and deadlines set
forth in Article I, Section 12 of our Bylaws. Our proxy
access bylaw provides that holders of at least 3% of our
outstanding shares, held by up to 20 shareholders,
holding the shares continuously for at least 3 years, can
nominate up to 20% of our Board for election at an
annual shareholders’ meeting.
For more specific information regarding these
deadlines in respect of the 2022 annual meeting of
shareholders, see “Shareholder Proposals for 2022
Annual Meeting” below. You should consult our Bylaws,
posted on the “Corporate Governance” section of our
website located at https://investor.dollargeneral.com,
for more detailed information regarding the processes
summarized above. No shareholder nominees have
been submitted for this year’s annual meeting.
What if a nominee is unwilling or unable to
serve?
That is not expected to occur. If it does, the persons
designated as proxies on the proxy card are authorized
to vote your proxy for a substitute designated by our
Board of Directors or the Board of Directors may
reduce the size of the Board.
Are there any family relationships between
any of the directors, executive officers or
nominees?
There are no family relationships between any of our
directors, executive officers or nominees.
FOR
The Board of Directors unanimously recommends that shareholders vote
FOR the election of each of the 8 nominees named in this proposal.
10
2021 Proxy Statement
CORPORATE GOVERNANCE
What governance practices are in place to promote effective independent Board leadership?
Our Board of Directors has adopted a number of governance practices to promote effective independent Board
leadership, such as:
Independent Board Chairman
Mr. Calbert, an independent director, serves as our Chairman of the Board. In this role,
Mr. Calbert serves as a liaison between the Board and our CEO, approves Board meeting
agendas, facilitates communication of annual evaluation feedback to the Board and to
individual directors as further discussed below, and participates with the Compensation
Committee in the annual CEO performance evaluation. This decision allows our CEO to
focus his time and energy on managing our business, while our Chairman devotes his time
and attention to matters of Board oversight and governance. The Board, however,
recognizes that no single leadership model is right for all companies and at all times, and
the Board will review its leadership structure as appropriate to ensure it continues to be in
the best interests of Dollar General and our shareholders.
Annual Evaluations and Board Succession Planning
The Board, each standing committee, and each individual non-employee director are
evaluated annually using written questionnaires and a process approved by the Nominating
Committee. Mr. Calbert, as Chairman of both the Board and the Nominating Committee,
discusses the results of the individual evaluations, as well as succession considerations, with
each director. The Board and each committee review and discuss the results of the Board
and applicable committee evaluations, all with the goal of enhancing effective Board
leadership, effectiveness and oversight. These evaluations and discussions also help inform
director re-nomination decisions.
Regularly Scheduled Independent Director Sessions
Opportunity is available at each regularly scheduled Board meeting for executive sessions
of the non-management directors (all of whom are currently independent). Mr. Calbert, as
Chairman, presides over all executive sessions of the non-management and the
independent directors.
Shareholder Engagement
To build and maintain relationships with shareholders and to ensure their perspectives are
understood and considered by the Board, we conduct year-round outreach through our
senior management, investor relations and legal teams. In 2020, we also continued to
engage in focused shareholder engagement efforts regarding environmental, social and
governance (“ESG”) matters, inviting shareholders representing more than 58% of our
outstanding shares to discuss their perspectives on these matters. We ultimately held
conversations with investors comprising 52% of shares outstanding. As Chairman of both
the Board and the Nominating Committee, Mr. Calbert led the engagement with
shareholders representing over 25% of shares outstanding. Topics discussed during these
meetings generally centered on our COVID-19 response; ESG oversight, management and
disclosure; our executive compensation program structure; the Board refreshment and
evaluation process; and our overall governance profile. Feedback from these meetings was
shared with the Board to inform future decisions pertaining to these matters and helped
inform the Board’s decision to recommend the Charter amendment described in Proposal 5
to implement a shareholder special meeting right.
Annual CEO Performance Evaluations
The CEO is annually evaluated under the leadership of the Compensation Committee and
the Chairman of the Board. All independent directors are invited to provide input into this
discussion.
2021 Proxy Statement
11
CORPORATE GOVERNANCE
What is the Board’s role in risk oversight?
Our Board of Directors and its three standing
committees, the Audit Committee, the Compensation
Committee and the Nominating Committee, have an
important role in our risk oversight process. The entire
Board is regularly informed about risks through the
committee reporting process, as well as through special
reports and updates from management and advisors.
This enables the Board and its committees to
coordinate the risk oversight role, particularly with
respect to risk interrelationships. The Board believes
this division of risk management responsibilities
effectively addresses the material risks facing Dollar
General. The Board further believes that our leadership
structure, described above, supports the risk oversight
function of the Board as it allows our independent
directors, through independent Board committees and
executive sessions of independent directors, to exercise
effective oversight of management’s actions in
identifying risks and implementing effective risk
management policies and controls.
Strategic Planning Risk Oversight. Our company’s
strategy is firmly rooted in our long-standing mission of
Serving Others, as we consistently strive to improve our
performance while retaining our customer-centric
focus. The Board actively oversees our corporate
strategy and related risks through both annual strategic
planning meetings and discussions and reports on the
status of and risks to our strategic initiatives, including
those arising from COVID-19, at quarterly meetings.
Enterprise Risk Oversight. We identify and manage our
key risks using our enterprise risk management
program. This framework evaluates significant internal
and external business, financial, legal, reputational and
other risks, identifies mitigation strategies, and assesses
any residual risk. The program employs interviews with
various levels of management and our Board and
reviews of strategic initiatives, recent or potential
legislative or regulatory changes, certain internal
metrics and other information. The Audit Committee
oversees our enterprise risk management program,
reviewing enterprise risk evaluation results at least
annually and high residual risk categories, along with
their mitigation strategies, quarterly. In addition, as part
of its regular review of progress versus the strategic
plan, our Board reviews related material risks as
appropriate. Our General Counsel also periodically
provides information to the Board regarding our
insurance coverage and programs as well as litigation
and other legal risks.
Cybersecurity Risk Oversight. In addition to
consideration as part of the enterprise risk
management program, cybersecurity risk is further
12
2021 Proxy Statement
evaluated through various internal and external audits
and assessments designed to validate the effectiveness
of our controls for managing the security of our
information assets. Management develops action plans
to address select identified opportunities for
improvement, and the Audit Committee quarterly
reviews reports and metrics pertaining to cybersecurity
risks and mitigation efforts with our Chief Information
Officer and our Chief Information Security Officer.
Human Capital Management Oversight. Our Board of
Directors and the Compensation Committee oversee
aspects of our human capital management. Our Board
annually discusses management succession planning
with the Chief Executive Officer and the Chief People
Officer, reviews significant employee-related litigation
and legal matters at least quarterly with our General
Counsel, and periodically discusses our diversity and
inclusion initiatives with our Vice President of Diversity
and Inclusion. Our Board also has regularly reviewed
our COVID-19 response with our Chief Executive
Officer since March 2020. In addition, the
Compensation Committee oversees our executive
compensation program and the overall compensation
philosophy and principles for the general employee
population and reviews quarterly our diversity and
inclusion efforts and results.
Governance, Corporate Social Responsibility and
Sustainability Risk Oversight. The Nominating
Committee has responsibility for general oversight of
corporate governance, including oversight of our
ESG-related shareholder outreach program and
shareholder proposals. The Nominating Committee
receives regular reports on ESG engagements with
shareholders and viewpoints provided by shareholders
and reviews detailed information regarding corporate
governance trends and practices, all of which informs
recommendations to the Board. Some recent examples
of changes recommended by the Nominating
Committee as a result of these reviews include the
implementation of proxy access in 2017, the removal of
the supermajority voting provisions from our Charter
and Bylaws in 2020 and the Company-sponsored
proposal (Proposal 5) to implement the right of
shareholders holding in the aggregate at least 25% of
our common stock to request special meetings. The
Nominating Committee also was recently delegated
oversight responsibility for significant corporate social
responsibility and sustainability matters, except to the
extent that a matter is overseen by the full Board or a
separate committee.
CORPORATE GOVERNANCE
What other functions are performed by the Board’s Committees?
The functions of the Board’s three standing committees
are described in applicable Board-adopted written
charters available on the “Corporate Governance”
section of our website located at
https://investor.dollargeneral.com and are summarized
below along with each committee’s current
membership. In addition to the functions outlined
below, each committee performs an annual
self-evaluation, periodically reviews and reassesses its
charter, evaluates and makes recommendations
concerning shareholder proposals that are within the
committee’s expertise, and performs the risk oversight
roles outlined above.
Name of
Committee & Members
AUDIT:
Mr. Rhodes, Chairperson
Mr. Bryant
Ms. Sandler
Committee Functions
• Selects the independent auditor and periodically considers the advisability of
audit firm rotation
• Annually evaluates the independent auditor’s qualifications, performance and
independence, as well as the lead audit partner and reviews the annual report
on the independent auditor’s internal quality control procedures and any
material issues raised by its most recent review of internal quality controls
• Pre-approves audit engagement fees and terms and all permitted non-audit
services and fees, and discusses the audit scope and any audit problems or
difficulties
• Sets policies regarding the hiring of current and former employees of the
independent auditor
• Discusses the annual audited and quarterly unaudited financial statements with
management and the independent auditor
• Reviews CEO/CFO disclosures regarding any significant deficiencies or
material weaknesses in our internal control over financial reporting, and
establishes procedures for receipt, retention and treatment of complaints
regarding accounting or internal controls
• Discusses the types of information to be disclosed in earnings press releases
and provided to analysts and rating agencies
• Oversees our enterprise risk management program, including reports and
metrics pertaining to cybersecurity risks
• Reviews internal audit activities, projects and budget
• Discusses with our general counsel legal matters having an impact on financial
statements
• Furnishes the committee report required in our proxy statement
2021 Proxy Statement
13
CORPORATE GOVERNANCE
Name of
Committee & Members
COMPENSATION:
Ms. Fili-Krushel, Chairperson
Mr. Bryant
Mr. McGuire
Committee Functions
• Reviews and approves corporate goals and objectives relevant to CEO
compensation
• Determines executive officer compensation (with an opportunity for the
independent directors to ratify CEO compensation) and recommends Board
compensation for Board approval
• Oversees overall compensation philosophy and principles for the general
employee population
• Establishes short-term and long-term incentive compensation programs for
senior officers and approves all equity awards
• Oversees share ownership guidelines and holding requirements for Board
members and senior officers
• Oversees the performance evaluation process for senior officers
• Reviews and discusses disclosure regarding executive compensation, including
Compensation Discussion and Analysis and compensation tables (in addition
to preparing the report on executive compensation for our proxy statement)
• Selects and determines fees and scope of work of its compensation consultant
• Oversees and evaluates the independence of its compensation consultant and
other advisors
• Oversees diversity and inclusion efforts and results
NOMINATING AND GOVERNANCE:
• Develops and recommends criteria for selecting new directors
Mr. Calbert, Chairperson
Ms. Fili-Krushel
Ms. Sandler
Mr. Santana
• Screens and recommends to our Board individuals qualified to serve on our
Board
• Recommends Board committee structure and membership
• Recommends persons to fill Board and committee vacancies
• Develops and recommends Corporate Governance Guidelines and corporate
governance practices and oversees corporate governance issues, including the
ESG-related shareholder engagement program
• Oversees the process governing annual Board, committee and director
evaluations
• Oversees significant corporate social responsibility and sustainability matters
• Evaluates ESG-related shareholder proposals unless within the subject matter
jurisdiction or expertise of another independent Board committee
Does an audit committee financial expert
serve on the Audit Committee?
he or she was a director and a member of each
applicable committee.
Yes. Our Board has determined that Mr. Rhodes is an
audit committee financial expert who is independent as
defined in NYSE listing standards and in our Corporate
Governance Guidelines.
How often did the Board and its committees
meet in 2020?
During 2020, our Board, Audit Committee,
Compensation Committee and Nominating Committee
met 5, 5, 6 and 3 times, respectively. Each incumbent
director attended at least 75% of the total of all
meetings of the Board and committees on which he or
she served which were held during the period for which
14
2021 Proxy Statement
What is Dollar General’s policy regarding
Board member attendance at the annual
meeting?
Our Board of Directors has adopted a policy that all
directors should attend annual shareholders’ meetings
unless attendance is not feasible due to unavoidable
circumstances. The 2020 annual shareholders’ meeting
was held virtually as a result of precautions related to
the COVID-19 pandemic. All persons serving as Board
members at the time of the 2020 annual shareholders’
meeting attended the meeting virtually.
Does Dollar General have a management
succession plan?
Yes. Our Board of Directors ensures that a formalized
process governs long-term management development
and succession and formally reviews our succession
plan for officers, as well as other notable talent, at least
annually. Our comprehensive program encompasses
not only our CEO and other executive officers but all
employees through the front-line supervisory level. The
program focuses on key succession elements, including
identification of potential successors for positions
where internal succession is appropriate, assessment of
each potential successor’s level of readiness, diversity
considerations, and preparation of individual growth
and development plans. Our long-term business
strategy is also considered with respect to CEO
succession planning. In addition, we maintain and
review with the Board periodically a confidential
procedure for the timely and efficient transfer of the
CEO’s responsibilities in the event of an emergency or
his sudden incapacitation or departure.
Are there share ownership guidelines and
holding requirements for Board members
and senior officers?
Yes. Details of our share ownership guidelines and
holding requirements for Board members and senior
officers are included in our Corporate Governance
Guidelines. See “Compensation Discussion and
Analysis—Share Ownership Guidelines and Holding
CORPORATE GOVERNANCE
Requirements” and “Director Compensation” for more
information on these guidelines and holding
requirements. The Compensation Committee
establishes the related administrative details.
How can I communicate with the Board of
Directors?
We describe our Board-approved process for security
holders and other interested parties to contact the
entire Board, a particular director, or the
non-management directors or independent directors as
a group on the “Corporate Governance” section of our
website located at https://investor.dollargeneral.com.
Where can I find more information about
Dollar General’s governance practices?
Our governance-related information is posted on
https://investor.dollargeneral.com under “Corporate
Governance,” including our Corporate Governance
Guidelines, Code of Business Conduct and Ethics, the
charter of each of the Audit Committee, the
Compensation Committee and the Nominating
Committee, and the name(s) of the person(s) chosen
to lead the executive sessions of the non-management
directors and, if different, of the independent directors.
This information is available in print to any shareholder
who sends a written request to: Investor Relations,
Dollar General Corporation, 100 Mission Ridge,
Goodlettsville, Tennessee 37072.
2021 Proxy Statement
15
DIRECTOR COMPENSATION
Our director compensation program is designed to fairly pay directors for their time and efforts and to align their
interests with the long-term interests of our shareholders. The Compensation Committee reviews at least once
every two years the form and amount of director compensation in light of these goals and makes related
recommendations to the Board of Directors. The Committee considers peer group market data as the primary
market reference point, survey data of general industry companies with revenues in excess of $10 billion for a
general understanding of compensation practices in the broader market context, and directional recommendations,
all as presented by its independent compensation consultant, Pearl Meyer. More information about our peer group
and the Pearl Meyer engagement can be found under “Use of Market Data” and “Use of Outside Advisors,”
respectively, in “Compensation Discussion and Analysis.”
Management serves in an administrative and support role for the Compensation Committee and Pearl Meyer,
conducting research, compiling data, providing necessary Company-specific information, or otherwise assisting as
requested. The Committee also may seek management’s viewpoint on Pearl Meyer’s analysis and
recommendations.
The following table and text summarize the compensation earned by or paid to each person who served as a
non-employee member of our Board of Directors during all or part of 2020. Mr. Vasos, whose executive
compensation is discussed under “Executive Compensation” below, was not separately compensated for his service
on the Board. We have omitted the columns pertaining to “Non-Equity Incentive Plan Compensation” and “Change
in Pension Value and Nonqualified Deferred Compensation Earnings” because they are inapplicable.
Fiscal 2020 Director Compensation
Name(1)
Warren F. Bryant
Michael M. Calbert
Sandra B. Cochran
Fees Earned or
Paid in Cash
($)(2)
95,000
Stock
Awards
($)(3)
178,027
112,500
377,216
22,706
—
Patricia D. Fili-Krushel
115,000
178,027
Timothy I. McGuire
95,000
178,027
William C. Rhodes, III
120,000
178,027
Debra A. Sandler
Ralph E. Santana
79,341
178,027
95,000
178,027
Option
Awards
($)(4)
All Other
Compensation
($)(5)
Total
($)
—
—
—
—
—
—
—
—
1,471
274,498
3,330
493,046
222,784
245,490
1,471
294,498
1,471
274,498
1,471
299,498
1,029
258,397
1,471
274,498
(1) Ms. Sandler joined our Board on April 1, 2020. Ms. Cochran served on our Board through April 27, 2020.
(2)
In addition to the annual Board retainer, Messrs. Calbert and Rhodes and Ms. Fili-Krushel earned annual retainers for service as committee
chairpersons during fiscal 2020.
(3) Represents the grant date fair value of restricted stock units (“RSUs”) awarded to Mr. Calbert on February 3, 2020 ($199,189) for his annual
Chairman of the Board retainer, as well as to each director (including Mr. Calbert) other than Ms. Cochran on May 27, 2020 ($178,027), in each
case computed in accordance with FASB ASC Topic 718. Information regarding assumptions made in the valuation of these awards is included
in Note 9 of the annual consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 29, 2021, filed
with the SEC on March 19, 2021 (our “2020 Form 10-K”). As of January 29, 2021, each of the persons listed in the table above had the following
total unvested RSUs outstanding (including additional unvested RSUs credited as a result of dividend equivalents earned with respect to such
RSUs): each of Messrs. Bryant, McGuire, Rhodes and Santana and Mss. Fili-Krushel and Sandler (956); Mr. Calbert (2,252); and Ms. Cochran (0).
(4) The Board eliminated the use of stock option awards as part of director compensation beginning in fiscal 2015. As of January 29, 2021, each of
the persons listed in the table above had the following total unexercised stock options outstanding (whether or not then exercisable): each of
Messrs. Bryant, Calbert and Rhodes (13,013); Ms. Fili-Krushel (12,892); and each of Messrs. McGuire and Santana and Mss. Cochran and
Sandler (0).
(5) Represents the dollar value of dividend equivalents paid, accumulated or credited on unvested RSUs and, for Ms. Cochran: (a) $220,984, which
is the fair market value of RSUs and associated accumulated dividend equivalents that experienced accelerated vesting upon Ms. Cochran's
resignation from our Board, as determined based on the closing stock price on the vesting acceleration date, plus the cash received for
fractional shares in connection with the payment of such RSUs and associated dividend equivalents, and (b) cash reimbursement of $1,800 to
offset the estimated federal income tax obligation on a retirement gift. Perquisites and personal benefits, if any, totaled less than $10,000 per
director and therefore are not included in the table.
16
2021 Proxy Statement
DIRECTOR COMPENSATION
Each non-employee director receives payment (prorated as applicable) for a fiscal year in quarterly installments of
the following cash compensation, as applicable, along with an annual award of RSUs, payable in shares of our
common stock, having the estimated value listed below:
Board
Retainer
($)
Audit
Committee
Chairperson
Retainer
($)
Compensation
Committee
Chairperson
Retainer
($)
Nominating
Committee
Chairperson
Retainer
($)
Estimated
Value of
Equity
Award
($)
95,000
25,000
20,000
17,500
165,000
Fiscal
Year
2020
The RSUs are awarded under our Amended and
Restated 2007 Stock Incentive Plan (our “2007 Stock
Incentive Plan”) or, for awards made on or after the
effective date of our 2021 Stock Incentive Plan if
approved by shareholders at the annual meeting, under
our 2021 Stock Incentive Plan. The RSUs are awarded
annually to each non-employee director who is elected
or re-elected at the annual shareholders’ meeting and
to any new director appointed thereafter but before
February 1 of a given year. The RSUs are scheduled to
vest on the first anniversary of the grant date subject
to certain accelerated vesting conditions. Directors
generally may defer receipt of shares underlying the
RSUs.
In addition to the fees outlined above, the Chairman of
the Board receives an annual retainer delivered in the
form of RSUs, payable in shares of our common stock
and scheduled to vest on the first anniversary of the
grant date, subject to certain accelerated vesting
conditions, having an estimated value of $200,000. The
RSUs are awarded under our 2007 Stock Incentive Plan
or, for awards made on or after the effective date of
our 2021 Stock Incentive Plan, under our 2021 Stock
Incentive Plan.
The forms and amounts of director compensation as
outlined above were recommended by the
Compensation Committee and approved by the Board
after taking into account market data,
recommendations of the Committee’s compensation
consultant, Pearl Meyer, and, for the additional equity
award to the Chairman of the Board, his further
responsibilities to the Company.
Up to 100% of cash fees earned for Board services in a
fiscal year generally may be deferred under the
Non-Employee Director Deferred Compensation Plan.
Benefits are payable upon separation from service in
the form, as elected by the director at the time of
deferral, of a lump sum distribution or monthly
payments for 5, 10 or 15 years. Participating directors
can direct the hypothetical investment of deferred fees
into funds identical to those offered in our 401(k) Plan
and will be credited with the deemed investment gains
and losses. The amount of the benefit will vary
depending on the fees the director has deferred and
the deemed investment gains and losses. Benefits upon
death are payable to the director’s named beneficiary
in a lump sum. In the event of a director’s disability (as
defined in the Non-Employee Director Deferred
Compensation Plan), the unpaid benefit will be paid in
a lump sum. Participant deferrals are not contributed to
a trust, and all benefits are paid from Dollar General’s
general assets.
Our non-employee directors are subject to share
ownership guidelines, expressed as a multiple of the
annual cash retainer payable for service on our Board,
and holding requirements. The current ownership
guideline is 5 times and should be acquired within
5 years of election to the Board. When the ownership
guideline is increased, incumbent non-employee
directors are allowed an additional year to acquire the
incremental multiple. Each non-employee director is
required to retain ownership of 100% of all net after-tax
shares granted by Dollar General until reaching the
share ownership target. As of January 29, 2021, each of
our Board members was in compliance with our share
ownership and holding requirement policy either
because he or she met the guideline or was within the
allotted grace period.
2021 Proxy Statement
17
DIRECTOR INDEPENDENCE
Is Dollar General subject to the NYSE
governance rules regarding director
independence?
Yes. A majority of our directors must satisfy the
independence requirements set forth in the NYSE
listing standards. All members of the Audit Committee,
the Compensation Committee and the Nominating
Committee also must be independent to comply with
NYSE listing standards and, in the case of the Audit
Committee, with SEC rules. The NYSE listing standards
define specific relationships that disqualify directors
from being independent and further require that the
Board of Directors affirmatively determine that a
director has no material relationship with Dollar General
in order to be considered “independent.” The SEC’s
rules and NYSE listing standards contain separate
definitions of independence for members of audit
committees and compensation committees,
respectively.
How does the Board of Directors determine
director independence?
Our Board of Directors determines the independence
of each director and director nominee using guidelines
it has adopted, which include all elements of
independence in the NYSE listing standards and SEC
rules as well as certain Board-adopted categorical
independence standards. These guidelines are detailed
within our Corporate Governance Guidelines posted on
the “Corporate Governance” section of our website
located at https://investor.dollargeneral.com.
The Board first considers whether any director or
nominee has a relationship covered by the NYSE listing
standards that would prohibit an independence finding
for Board or committee purposes. The Board then
analyzes any relationship of the remaining eligible
directors and nominees with Dollar General or our
management that falls outside the parameters of the
Board’s separately adopted categorical independence
standards to determine if that relationship is material.
The Board may determine that a person who has a
relationship outside such parameters is nonetheless
independent because the relationship is not considered
to be material. Any director who has a material
relationship with Dollar General or its management is
not considered to be independent. Absent special
circumstances, the Board does not consider or analyze
any relationship that management has determined falls
within the parameters of the Board’s separately
adopted categorical independence standards.
Are all of the directors and nominees
independent?
Our CEO, Todd J. Vasos, is the only non-independent
director. Our Board of Directors has affirmatively
determined that each of Warren F. Bryant, Michael M.
Calbert, Patricia D. Fili-Krushel, Timothy I. McGuire,
William C. Rhodes, III, Debra A. Sandler and Ralph E.
Santana, as well as former Board member Sandra B.
Cochran who served for part of 2020, is independent
under both the NYSE listing standards and our
additional independence standards. Except as
described below, any relationship between an
independent director and Dollar General or our
management fell within the Board-adopted categorical
standards and, accordingly, was not reviewed or
considered by the Board in making independence
decisions. There is no person currently serving or who
served in 2020 on the Audit Committee, the
Compensation Committee or the Nominating
Committee that does or did not meet, as applicable,
the NYSE independence requirements for membership
on those committees, our additional standards and, as
to the Audit Committee, SEC rules.
In reaching the determination that Ms. Cochran is
independent, the Board considered that her brother
has been employed by Dollar General since 2009 and
currently serves as Vice President of Government
Affairs, a non-executive officer position, as described in
more detail under “Transactions with Management and
Others.” While still a member of our Board, Ms. Cochran
did not serve on the Compensation Committee which
approves decisions pertaining to Mr. Brophy’s
compensation, and she did not participate in his
performance evaluations. Mr. Brophy’s cash
compensation and equity awards were approved by the
Compensation Committee pursuant to our related-
party transactions approval policy.
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2021 Proxy Statement
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Does the Board of Directors have a related-
party transactions approval policy?
Yes. Our Board of Directors has adopted a written
policy for the review, approval or ratification of “related
party” transactions. A “related party” for this purpose
includes our directors, director nominees, executive
officers and greater than 5% shareholders, and any of
their immediate family members, and a “transaction”
includes one in which (1) the total amount may exceed
$120,000, (2) Dollar General is a participant and (3) a
related party will have a direct or indirect material
interest (other than as a director or a less than 10%
owner of another entity, or both).
The policy requires prior Board approval for known
related party transactions and Board review of any
related party transactions that may have been entered
into unknowingly without Board approval as surfaced in
an annual internal search, in each case subject to the
exceptions summarized below. The related party may
not participate in approval of the transaction and must
provide to the Board all material information
concerning the transaction.
Each of our Chairman and our CEO may approve a
related party transaction in which he is not involved if
the total anticipated amount is less than $1 million and
he informs the Board of the transaction. In addition, the
transactions below are deemed pre-approved without
Board review or approval:
• Transactions involving a total amount that does not
exceed the greater of $1 million or 2% of the entity’s
annual consolidated revenues (total consolidated
assets in the case of a lender) if no related party who
is an individual participates in providing the services
or goods to, or negotiations with, us on the entity’s
behalf or receives special compensation or benefit as
a result.
• Charitable contributions if the total amount does not
exceed 2% of the recipient’s total annual receipts and
no related party who is an individual participates in
the grant decision or receives any special
compensation or benefit as a result.
• Transactions where the interest arises solely from
Dollar General share ownership and all shareholders
receive the same benefit on a pro rata basis.
• Transactions where the rates or charges are
determined by competitive bid or for services as a
common or contract carrier or public utility at rates
or charges fixed in conformity with law or
governmental authority.
• Transactions involving services as a bank depositary
of funds, transfer agent, registrar, trustee under a
trust indenture, or similar services.
• Compensatory transactions available on a
nondiscriminatory basis to all salaried employees
generally, ordinary course business travel expenses
and reimbursements, or compensatory arrangements
to directors, nominees, officers or other related
parties that otherwise have been approved by the
Board or an authorized committee.
What related-party transactions existed in
2020 or are planned for 2021?
Stephen Brophy, the brother of former director
Ms. Cochran, has been employed by Dollar General
since 2009 and currently serves as our Vice President
of Government Affairs, a non-executive officer position.
For 2020, Mr. Brophy earned from Dollar General total
cash compensation (comprised of his base salary and
bonus compensation) of approximately $520,000 and
received an annual equity award consisting of 1,783
nonqualified stock options, 190 RSUs and 190 PSUs, in
each case on terms consistent with annual equity
awards received by Dollar General employees at
Mr. Brophy’s job grade level and substantially similar to
the forms of award agreements on file with the SEC.
Such cash compensation and equity awards were
approved by the Compensation Committee pursuant to
our related-party transactions approval policy.
Mr. Brophy also is eligible to participate in employee
benefits plans and programs available to our other
full-time employees.
2021 Proxy Statement
19
EXECUTIVE COMPENSATION
This section provides details of fiscal 2020 compensation for our named executive officers: Todd J. Vasos, Chief
Executive Officer; John W. Garratt, Executive Vice President and Chief Financial Officer; Jeffery C. Owen, Chief
Operating Officer; Rhonda M. Taylor, Executive Vice President and General Counsel; Carman R. Wenkoff, Executive
Vice President and Chief Information Officer; and Jason S. Reiser, former Executive Vice President and Chief
Merchandising Officer.
Compensation Discussion and Analysis
Overview
Our executive compensation program is designed to serve the long-term interests of our shareholders. To deliver
superior shareholder returns, we believe it is critical to offer a competitive compensation package that will attract,
retain, and motivate experienced executives with the requisite expertise. Our program is designed to balance the
short-term and long-term components and thus incent achievement of our annual and long-term business
strategies, to pay for performance, and to maintain our competitive position in the market in which we compete for
executive talent.
Compensation Best Practices
We strive to align our executives’ interests with those of our shareholders and to follow sound corporate
governance practices.
Compensation Practice
Dollar General Policy
Pay for performance
A significant portion of compensation, including our annual Teamshare cash
bonus compensation and our equity incentive compensation, is linked to the
financial performance of key metrics or stock price appreciation.
Robust share ownership guidelines
and holding requirements
Our share ownership guidelines and holding requirements create further
alignment with shareholders’ long-term interests. See “Share Ownership
Guidelines and Holding Requirements.”
Clawback policy
Our annual PSU equity awards and the annual Teamshare cash bonus program
allow for the clawback of performance-based incentive compensation paid or
awarded to a named executive officer in the case of a material financial
restatement of our consolidated financial statements resulting from fraud or
intentional misconduct on the part of the executive officer.
No hedging or pledging Dollar General
securities or holding Dollar General
securities in margin accounts
Our policy prohibits executive officers and Board members (and certain of their
family members, entities and trusts) from hedging against any decrease in the
market value of Dollar General equity securities awarded by our company and
held by them, and from pledging as collateral or holding in a margin account
any securities issued by Dollar General. See “Hedging and Pledging Policies.”
No excise tax gross-ups and minimal
income tax gross-ups
We do not provide tax gross-up payments to named executive officers other
than on relocation-related items.
Double-trigger provisions
All unvested equity awards granted to named executive officers include a
“double-trigger” vesting provision upon a change in control.
No repricing or cash buyout of
underwater stock options without
shareholder approval
Our equity incentive plan prohibits repricing underwater stock options,
reducing the exercise price of stock options or replacing awards with cash or
another award type, without shareholder approval.
Annual compensation risk assessment
At least annually, our Compensation Committee assesses the risk of our
compensation program.
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2021 Proxy Statement
Pay for Performance
Consistent with our philosophy, and as illustrated to the
right, a significant portion of annualized total target
compensation for our named executive officers in 2020
was variable/at-risk as a result of being either
performance-based, linked to changes in our stock
price, or both.
In addition, the following financial performance was
achieved in accordance with our short-term and
long-term incentive plans:
• Teamshare Bonus Program
In connection with our 2020 Teamshare bonus
program, we achieved 2020 adjusted EBIT (as
defined and calculated for purposes of the
Teamshare bonus program) of $3.630 billion, or
145.0% of the adjusted EBIT target, which being
greater than the maximum achievement level of 120%
allowed under the program, resulted in a 2020
Teamshare payout to each named executive officer
employed on the payment date at the maximum level
of 300.0% of his or her target Teamshare
bonus percentage opportunity (see “Short-Term
Cash Incentive Plan”).
• Performance Share Units
The portion of the awards granted in March 2020
subject to 2020 adjusted EBITDA performance was
earned at a maximum of 300.0% of target, based on
achieving adjusted EBITDA of $4.199 billion, or
136.7% of the adjusted EBITDA target (which is
greater than the maximum achievement level of
120%), and the portion of the awards granted in
March 2018 subject to 2018-2020 adjusted ROIC
performance was earned at the maximum of 300.0%
of target based on achieving adjusted ROIC of
21.78%, or 112.8% of the adjusted ROIC three-year
2018-2020 target (which is greater than the
maximum achievement level of 105.2%), in each case
as defined and calculated in the PSU award
agreements (see “Long-Term Equity Incentive
Program”).
Shareholder Response
The most recent shareholder advisory vote on our
named executive officer compensation was held on
May 27, 2020. Excluding abstentions and broker
non-votes, 92.5% of total votes were cast in support of
the program. Because we view this outcome as very
supportive of our compensation policies and practices,
we do not believe the vote requires consideration of
changes to the program. Nonetheless, because market
practices and our business needs continue to evolve,
we continually evaluate our program, including
shareholder feedback, and make changes when
warranted.
EXECUTIVE COMPENSATION
CEO
STI
16%
Salary
11%
89%
VARIABLE/
AT-RISK
LTI
73%
OTHER NEOs
(Averaged)
STI
19%
76%
VARIABLE/
AT-RISK
Salary
24%
LTI
57%
LTI — Long-Term Equity Incentive
(stock options and performance share units)
STI — Short-Term Cash Incentive
(Teamshare bonus program)
At our annual meeting of shareholders held on May 31,
2017, our shareholders expressed a preference that
advisory votes on executive compensation occur every
year. Consistent with this preference, our Board
implemented an annual advisory vote on executive
compensation until the next advisory vote on the
frequency of shareholder votes on executive
compensation, which will occur no later than our 2023
annual meeting of shareholders.
Philosophy and Objectives
We strive to attract, retain, and motivate persons with
superior ability, to reward outstanding performance,
and to align the long-term interests of our named
executive officers with those of our shareholders. The
2021 Proxy Statement
21
EXECUTIVE COMPENSATION
material compensation principles applicable to the
compensation of our named executive officers are
outlined below:
participates in private sessions with the Committee,
and Committee members are free to consult directly
with Pearl Meyer as desired.
• In determining total compensation, we consider a
reasonable range of the median of total
compensation of comparable positions at companies
within our peer group, while accounting for distinct
circumstances not reflected in the market data such
as unique job descriptions as well as our particular
niche in the retail sector and the impact that a
particular officer may have on our ability to meet
business objectives. For competitive or other
reasons, our levels of total compensation or any
component of compensation may exceed or be
below the median range of our peer group.
• We set base salaries to reflect the responsibilities,
experience, performance, and contributions of the
named executive officers and the salaries for
comparable positions, while maintaining an
appropriate balance between base salary and
incentive compensation.
• We reward named executive officers who enhance
our performance by linking cash and equity
incentives to the achievement of our financial goals.
• We promote share ownership to align the interests of
our named executive officers with those of our
shareholders.
• In approving compensation arrangements, we
consider recent compensation history, including
special or unusual compensation payments.
Oversight and Process
Oversight
The Compensation Committee of our Board of
Directors, or a subcommittee thereof if required for tax
or other reasons, in each case consisting entirely of
independent directors, determines and approves the
compensation of our named executive officers.
Throughout this “Compensation Discussion and
Analysis,” the use of the term Compensation
Committee (or Committee) means either the entire
committee or a subcommittee thereof if required for
tax or other reasons, as applicable. The independent
members of our Board are provided the opportunity to
ratify the Committee’s determinations pertaining to the
level of CEO compensation.
Use of Outside Advisors
The Compensation Committee has selected Pearl
Meyer to serve as its compensation consultant and has
determined that Pearl Meyer is independent and that
its work has not raised any conflicts of interest. When
requested by the Committee, a Pearl Meyer
representative attends Committee meetings and
22
2021 Proxy Statement
The Committee (or its Chairperson) determines the
scope of Pearl Meyer’s services and has approved a
written agreement that details the terms under which
Pearl Meyer will provide independent advice to the
Committee. The approved scope of Pearl Meyer’s work
generally includes the performance of analyses and
provision of independent advice related to our
executive and non-employee director compensation
programs and related matters in support of the
Committee’s decisions, and more specifically, includes
performing preparation work associated with
Committee meetings, providing advice in areas such as
compensation philosophy, compensation risk
assessment, peer group, incentive plan design, target
versus realizable pay, executive compensation
disclosure, emerging best practices and changes in the
regulatory environment, and providing competitive
market studies. Pearl Meyer, along with management,
also prepares market data for consideration by the
Committee in making decisions on items such as base
salary, the Teamshare bonus program, and the
long-term incentive program.
Management’s Role
Our executive management team prepares and
recommends our annual financial plan to our Board of
Directors for approval and establishes a 3-year financial
plan. The financial performance targets used in our
incentive compensation programs are the same as
those in such financial plans and approved by our
Compensation Committee. Our CEO and our Chief
People Officer, as well as non-executive members of
the human resources group, provide assistance to the
Committee and Pearl Meyer regarding executive
compensation matters, including conducting research,
compiling data and/or making recommendations
regarding compensation amount, compensation mix,
incentive program structure alternatives, target versus
realizable pay, and compensation-related governance
practices, as well as providing information to and
coordinating with Pearl Meyer as requested.
Additionally, our General Counsel may provide legal
advice to the Committee regarding executive
compensation and related governance and legal
matters and contractual arrangements from time to
time. Although these recommendations may impact
each of such officers’ compensation to the extent they
participate in the plans and programs, none of such
officers make recommendations to the Committee
regarding their specific compensation. For the role of
management in named executive officers’ performance
evaluations, see “Use of Performance Evaluations”
below. Although the Committee values and solicits
management’s input, it retains and exercises sole
authority to make decisions regarding named executive
officer compensation.
Use of Performance Evaluations
Each member of the Board of Directors is asked to
provide feedback to the Chairman of the Board
regarding the CEO’s overall performance. The Chairman
of the Board shares such information with the
Compensation Committee. The Compensation
Committee, together with the Chairman of the Board,
assesses the performance of the CEO, and the CEO
evaluates and reports to the Committee on the
performance of each of the other named executive
officers, in each case versus previously established
goals. The Committee also has input into each named
executive officer’s performance evaluation. These
evaluations are subjective; no objective criteria or
relative weighting is assigned to any individual goal or
factor.
Performance ratings serve as an eligibility threshold for
annual base salary increases and may directly impact
the amount of such increases. The Committee starts
with the percentage base salary increase that equals
the overall budgeted increase for our U.S.-based
employee population and approves differing merit
increases to base salary based upon each named
executive officer’s individual performance rating. The
Committee then considers whether additional
adjustments are necessary to reflect performance,
responsibilities or qualifications; to bring pay within a
reasonable range of the peer group; due to a change in
role or duties; to achieve a better balance between
base salary and incentive compensation; or for other
reasons the Committee believes justify a variance from
the merit increase.
Performance evaluation results have the potential to
affect the amount of Teamshare bonus payout because
the Committee is allowed to adjust payments upward
or downward depending upon the named executive
officer’s individual performance or other factors,
although the Committee does not always exercise this
right each year.
An unsatisfactory performance rating will reduce the
number of, or completely eliminate, stock options
awarded to the named executive officer in the following
year. In addition, individual performance and other
factors, such as company and department
performance, retention, and succession, are used as
part of a subjective assessment to determine each
named executive officer’s equity award value within a
previously determined range of values.
Use of Market Data
The Compensation Committee approves, periodically
reviews, and utilizes a peer group when making
compensation decisions (see “Philosophy and
EXECUTIVE COMPENSATION
Objectives”). The peer group data typically is
considered annually for base salary adjustments, target
equity award values, Teamshare target bonus
opportunities, and total target compensation, and
periodically when considering structural changes to our
executive compensation program.
Our peer group consists of companies selected
according to their similarity to our operations, services,
revenues, markets, availability of information, and any
other information the Committee deems appropriate.
Such companies are likely to have executive positions
comparable in breadth, complexity and scope of
responsibility to ours. The peer group used for 2020
compensation decisions, which was unchanged from
the prior year’s peer group, consisted of:
Aramark
AutoZone
Best Buy
CarMax
Dollar Tree
Genuine Parts
Kohl’s
L Brands
Lowe’s
Ross Stores
Starbucks
Sysco
Target
TJX Companies
Tractor Supply
Yum! Brands
Pearl Meyer provides peer group data annually for the
CEO, to ensure that the Committee is aware of any
significant movement in CEO compensation levels
within the peer group, and biennially for each named
executive officer position below CEO. In alternating
years, the Committee uses the prior year data for
non-CEO compensation decisions after applying an
aging factor recommended by Pearl Meyer. Thus, for
2020 non-CEO compensation decisions, the Committee
considered peer group data for 2019 aged by 3%.
Elements of Named Executive Officer
Compensation
We provide compensation in the form of base salary,
short-term cash incentives, long-term equity incentives,
benefits, and limited perquisites. We believe each of
these elements is a necessary component of the total
compensation package and is consistent with
compensation programs at companies with whom we
compete both for business and talent. Decisions
regarding each named executive officer’s 2020
compensation are discussed below, followed by a
description of each element of compensation and the
related applicable programs, as well as applicable
financial performance results certified with respect to
performance periods that ended in 2020.
2020 Compensation Generally
The Compensation Committee considered the annual
compensation of each named executive officer in
March 2020 and later determined Mr. Reiser’s additional
termination compensation upon his departure in
September 2020.
2021 Proxy Statement
23
EXECUTIVE COMPENSATION
(a) 2020 Compensation Decisions for Mr. Vasos
In March 2020, the Compensation Committee
considered the base salary, short-term incentive, and
long-term incentive components of Mr. Vasos’s
compensation, as well as his total target compensation,
in each case in comparison to the peer group data (see
“Use of Market Data”). After considering the peer
group data, as well as Mr. Vasos’s and the Company’s
fiscal 2019 performance (see “Use of Performance
Evaluations”), Mr. Vasos’s experience and tenure in the
CEO role, and CEO succession planning, the Committee
determined to increase Mr. Vasos’s base salary to
$1,350,000, effective April 1, 2020 (3.85% increase from
his prior year’s base salary), to maintain his target
short-term incentive bonus percentage opportunity
(150% of base salary) at his 2019 level, and to increase
his 2020 equity grant value to $9.0 million and structure
such award to enhance his performance and retention
incentives and, in the event of his early retirement after
April 1, 2021, to (a) secure his provision of up to
12 months of post termination transition services to the
Company, and (b) further protect shareholders and the
Company through an extension of his non-compete
and non-solicitation periods from two to three years
under his employment agreement. Considering all of
these factors and the peer group data, the Committee
believed that such actions placed each component of
Mr. Vasos’s 2020 compensation as well as his 2020 total
target compensation within a reasonable range of the
median of the peer group data. See “Short-Term Cash
Incentive Plan” and “Long-Term Equity Incentive
Program” for a description of such programs and
“Potential Payments Upon Termination or Change in
Control—Payments Upon Termination Due to
Retirement—Early Retirement” and “Potential Payments
Upon Termination or Change in Control—Payments
After a Change in Control—Equity Awards—Other
Stock Options and Performance Share Units” for a
description of the early retirement provisions of
Mr. Vasos’s 2020 equity award agreements.
(b) 2020 Compensation Decisions for Other
Named Executive Officers
In March 2020, the Compensation Committee
considered the base salary, short-term incentive, and
long-term incentive components, as well as total target
compensation, of the non-CEO named executive
officers, in each case in comparison to the peer group
data (see “Use of Market Data”), as well as each such
officer’s performance (see “Use of Performance
Evaluations”). The Committee made no change to any
such officer’s target short-term incentive bonus
percentage opportunity (for Mr. Owen, 100% of base
salary, and for all other non-CEO officers, 75% of base
salary) from the prior year’s level, which the Committee
concluded remained reasonably aligned with the peer
group data. See “Short-Term Cash Incentive Plan” for a
description of the bonus program.
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2021 Proxy Statement
Continuing the practice begun in 2019, the Committee
again in 2020 incorporated the use of an equity grant
value range to determine each non-CEO named
executive officer’s equity grant value level to achieve
better market alignment at the individual position level
while continuing to allow for subjective performance
differentiation and sufficiently incenting and retaining
such officers. The Committee determined the equity
grant value range based on the peer group data, and in
addition with regard to Mr. Owen’s equity grant value
range, the target grant value used for Mr. Owen’s equity
award upon his promotion in August 2019 to Chief
Operating Officer, and then determined each such
named executive officer’s actual grant value within the
range based on comparisons of each named executive
officer’s total target compensation against the peer
group data, as well as a subjective assessment of a
variety of factors outlined above under “Use of
Performance Evaluations.” Each such named executive
officer’s March 2020 equity grant value was: Mr. Garratt
($1.6 million), Mr. Owen ($2.2 million), Ms. Taylor and
Mr. Wenkoff ($1.5 million), and Mr. Reiser
($1.35 million). See “Long-Term Equity Incentive
Program” for a description of the equity awards.
In addition, the Committee approved base salary merit
increases in accordance with each such officer’s 2019
performance rating within the limitations of the 3%
overall U.S. merit budget increase for 2020, resulting in
a base salary increase of 3.51% for Messrs. Garratt,
Owen, and Wenkoff and Ms. Taylor and 2.51% for
Mr. Reiser, effective April 1, 2020. The Committee
determined that each such named executive officer’s
total target compensation for 2020 remained within a
reasonable range of the peer group median given the
responsibilities of the position and the experience and
contributions of the individual and thus no additional
base salary adjustments were made. See “Use of
Performance Evaluations.”
(c) Compensation Decisions Related to
Mr. Reiser’s Departure
Mr. Reiser departed from the Company effective
September 24, 2020. In addition to the amounts to be
paid to Mr. Reiser pursuant to the employment
agreement between the Company and Mr. Reiser dated
April 1, 2018 (see “Potential Payments upon
Termination or Change in Control—Payments Upon
Involuntary Termination—Involuntary Termination
without Cause”), the Compensation Committee
approved, contingent upon the execution and
effectiveness of the Release that is attached to and
made a part of Mr. Reiser’s employment agreement
with the Company, an additional lump sum cash
payment to Mr. Reiser of $1,582,646, less applicable
withholdings, in exchange for a six month extension of
the business protection provisions set forth in his
employment agreement with the Company pertaining
to his non-compete, non-disclosure and non-solicitation
obligations. See “Potential Payments upon Termination
or Change in Control—Payments Upon Voluntary
Termination—Voluntary Termination with Good Reason
or After Failure to Renew the Employment Agreement.”
Base Salary
Base salary promotes our recruiting and retention
objectives by reflecting the salaries for comparable
positions in the competitive marketplace, recognizing
performance, and providing a stable and predictable
income source for our executives. Our employment
agreements set forth minimum base salary levels,
which the Compensation Committee retains sole
discretion to increase from time to time. The
Committee routinely considers annual base salary
adjustments in March.
Short-Term Cash Incentive Plan
Our short-term cash incentive plan, called Teamshare,
provides an opportunity to receive a cash bonus
payment equal to a certain percentage of base salary
based upon Dollar General’s level of achievement of
one or more pre-established financial performance
targets. Accordingly, Teamshare fulfills an important
part of our pay for performance philosophy while
aligning the interests of our named executive officers
and our shareholders.
(a) 2020 Teamshare Structure
The Compensation Committee uses adjusted EBIT as
the Teamshare financial performance measure because
it is a comprehensive measure of corporate
performance that the Committee believes aligns with
our shareholders’ interests. For purposes of the 2020
Teamshare program, adjusted EBIT is defined as our
operating profit as calculated in accordance with U.S.
generally accepted accounting principles, but excludes
the impact of (a) costs, fees and expenses directly
related to the consideration, negotiation, preparation,
or consummation of any transaction that results in a
Change in Control (within the meaning of our 2007
Stock Incentive Plan) or to any securities offering;
(b) disaster-related charges; (c) gains or losses
associated with our LIFO computation; and (d) unless
the Committee disallows any such item, (i) any
unbudgeted loss as a result of the resolution of a legal
matter or (ii) any unplanned loss(es) or gain(s) related
to the implementation of accounting or tax legislative
changes or (iii) any unplanned loss(es) or gain(s) of a
non-recurring nature, provided that in the case of each
of (i), (ii) and (iii) such amount equals or exceeds
$1 million for a single loss or gain, as applicable, and
$10 million in the aggregate. For 2020, the Committee
disallowed exclusion of the impact of all losses and
gains resulting from COVID-19.
EXECUTIVE COMPENSATION
The Committee set the 2020 adjusted EBIT
performance goal at approximately $2.504 billion,
which was the adjusted EBIT target amount in our
Board-approved 2020 annual financial plan. The
threshold (below which no bonus may be earned) and
maximum (above which no further bonus may be
earned) performance levels are 90% and 120% of the
target level, respectively, as the Committee believes
such levels appropriately align pay and performance
and are reasonably consistent with the practices of our
peer group. Payouts for financial performance are
based on actual adjusted EBIT results and are
interpolated on a straight-line basis between the
threshold and target levels and between the target and
maximum levels.
The bonus payable to each named executive officer
employed with us on the payment date upon achieving
the target level of financial performance is equal to the
officer’s applicable percentage of base salary disclosed
under “2020 Compensation Generally,” unless the
Committee elects to consider other factors as allowed
under the program as described above under “Use of
Performance Evaluations”. Payout percentages at the
threshold and maximum performance levels are
calculated at 50% and 300%, respectively, of the
applicable target percentage of base salary.
(b) 2020 Teamshare Results
The Compensation Committee certified the adjusted
EBIT performance result at $3.630 billion (145.0% of the
adjusted EBIT target, which is greater than the
maximum achievement level of 120% under the
program) which resulted in 2020 Teamshare maximum
payouts to each named executive officer employed as
of March 26, 2021 of 300.0% of each such officer’s
target Teamshare bonus percentage opportunity. Such
amounts are reflected in the “Non-Equity Incentive
Plan Compensation” column of the Summary
Compensation Table. Mr. Reiser was ineligible to receive
a payout under the terms of the 2020 Teamshare
program because he was not employed with us on the
payment date.
(c) Significant 2021 Teamshare Structure Changes
For the 2021 Teamshare program approved by the
Committee in March 2021, the threshold and maximum
performance levels for the adjusted EBIT performance
measure are 85% and 130% of the target level,
respectively, and the corresponding
payout percentages at the threshold and maximum
performance levels will be calculated at 25% and 300%,
respectively. The Committee believes that these
changes to the performance and payout slopes are
appropriate to reduce the impact of uncontrollable
swings in performance that could contribute to
downside risk or upside windfall in light of continuing
uncertainties in our business arising from the impact of
2021 Proxy Statement
25
EXECUTIVE COMPENSATION
the COVID-19 pandemic and the resulting difficulty in
goal-setting these uncertainties create.
Long-Term Equity Incentive Program
Long-term equity incentives are an important part of
our pay for performance philosophy and are designed
to motivate named executive officers to focus on
long-term success for shareholders while rewarding
them for a long-term commitment to us. The
Compensation Committee considers annual equity
awards each March at its regular quarterly meeting and
considers additional equity awards in connection with
one-time events such as a new hire or promotion.
Equity awards are made under our shareholder-
approved 2007 Stock Incentive Plan.
(a) 2020 Annual Equity Award Structure
The Compensation Committee delivers the annual
equity awards to named executive officers 50% in
options and 50% in PSUs, believing that this mix
appropriately incents a long-term focus while aligning
the interests of management with those of
shareholders and is reasonably well aligned with the
practices of the peer group.
The options are granted with a per share exercise price
equal to the fair market value of one share of our
common stock on the grant date. With the exceptions
described below in “Special Provisions of Mr. Vasos’s
2020 Annual Equity Grant” for Mr. Vasos, the options
vest 25% annually on April 1 of each of the four
fiscal years following the fiscal year in which the grant
is made, subject to continued employment with us and
certain accelerated vesting provisions, and have a
ten-year term. The PSUs can be earned if specified
financial performance goals are achieved during the
applicable performance periods and if certain
additional vesting requirements are met as discussed
more specifically below.
For PSUs the Committee selects and sets targets for
financial performance measures, then establishes
threshold and maximum levels of performance derived
from those targets. The number of PSUs earned
depends on the level of financial performance achieved
versus such targets. The Committee selected adjusted
EBITDA and adjusted ROIC as the financial
performance measures for the 2020 PSUs. Half of the
award is subject to adjusted EBITDA performance and
half of the award is subject to adjusted ROIC
performance. The Committee believes that these
financial measures and the mix between them
appropriately align executives’ and shareholders’
interests and that the threshold and maximum levels
appropriately align pay and performance and are
reasonably consistent with the practices of the peer
group.
26
2021 Proxy Statement
For the 2020 PSU awards, a one-year performance
period corresponding to our 2020 fiscal year was
established for the PSUs which are subject to the
adjusted EBITDA performance measure. The adjusted
EBITDA performance goal of approximately
$3.072 billion was the target amount set forth in our
Board-approved 2020 annual financial plan. Further
increasing the focus on multi-year performance as a
counterbalance to short-term incentives, the PSUs
which are subject to the adjusted ROIC performance
measure are subject to a three-year performance
period beginning the first day of our 2020 fiscal year
and extending through the last day of our 2022 fiscal
year. The adjusted ROIC performance goal of 21.23% is
the average of the adjusted ROIC goals for each fiscal
year within the performance period as set forth in our
three-year financial plan as it existed at the time the
PSUs were awarded.
Adjusted EBITDA is calculated 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 excludes the impact
of all items excluded from the 2020 Teamshare program
adjusted EBIT calculation outlined above.
Adjusted ROIC for the three-year performance period
is calculated as (a) the result of (x) the sum of (i) our
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 excludes the impact of all items excluded
from the 2020 Teamshare program adjusted EBIT
calculation outlined above. For 2020, the Committee
disallowed exclusion of the impact of all losses and
gains resulting from COVID-19 in the adjusted EBITDA
and adjusted ROIC calculations.
The following tables show the amount (as a percent of
target) of such PSUs that could be earned at each of
the threshold, target, and maximum performance levels
for each applicable performance period, as well as the
2020 adjusted EBITDA performance result (which is
greater than the maximum achievement level of 120%)
and the resulting number of PSUs earned by each
eligible named executive officer as a result of such
performance reaching the maximum level of available
adjusted EBITDA performance payout.
Level*
Below Threshold
Threshold
Target
Maximum
2020 Results
EXECUTIVE COMPENSATION
Adjusted EBITDA (2020)
Result v.
Target (%)
EBITDA
Result ($)
(in billions)
PSUs Earned
(% of Target)
<90
90
100
120
136.7
<2.765
2.765
3.072
3.687
4.199
0
50
100
300
300.0
*
PSUs earned for performance between threshold, target, and maximum levels are interpolated in a manner similar to that used for our 2020
Teamshare bonus program.
Name
Mr. Vasos
Mr. Garratt
Mr. Owen
Ms. Taylor
Mr. Wenkoff
Mr. Reiser*
*
Mr. Reiser forfeited the 2020 PSUs upon his departure from Dollar General.
Level*
Below Threshold
Threshold
Target
Maximum
2020 PSUs Earned
(Adjusted EBITDA)
42,741
7,599
10,449
7,125
7,125
0
Adjusted ROIC (2020-2022)
Result v.
Target (%)
ROIC
Result (%)
PSUs Earned
(% of Target)
<95.3
95.3
100.0
104.7
<20.23
20.23
21.23
22.23
0
50
100
300
*
PSUs earned for performance between threshold, target, and maximum levels are interpolated in a manner similar to that used for our 2020
Teamshare bonus program.
Except as described below in “Special Provisions of
Mr. Vasos’s 2020 Annual Equity Grant” for Mr. Vasos,
the PSUs earned by each named executive officer for
fiscal 2020 adjusted EBITDA performance will vest in
equal one-third installments on April 1, 2021, April 1,
2022, and April 1, 2023, subject to such officer’s
continued employment with us and certain accelerated
vesting provisions. Subject to certain pro-rata vesting
conditions, the PSUs earned, if any, by each named
executive officer for adjusted ROIC performance during
the three-year performance period will vest on April 1,
2023, subject to such officer’s continued employment
with us and certain accelerated vesting provisions. All
vested PSUs will be settled in shares of our common
stock.
(b) Special Provisions of Mr. Vasos’s 2020 Annual
Equity Grant
For the reasons set forth above under “2020
Compensation Decisions for Mr. Vasos,” Mr. Vasos’s
option award agreement related to his 2020 annual
equity grant includes additional expiration, forfeiture
and accelerated vesting conditions, and his PSU award
agreement related to his 2020 annual equity grant
includes additional vesting, forfeiture and termination
provisions related to the PSUs earned as a result of
fiscal 2020 adjusted EBITDA performance, in each case,
in the event he terminates employment due to an early
retirement (as defined in the award agreements) after
April 1, 2021. For a detailed description of these award
agreement provisions, see “Potential Payments upon
Termination or Change in Control—Payments Upon
Termination Due to Retirement—Early Retirement” and
“Potential Payments upon Termination or Change in
Control—Payments After a Change in Control—Equity
Awards—Other Stock Options and Performance Share
Units.”
(c) 2018 PSU Awards – Completed 2018-2020
Performance Period
Certain of the PSUs awarded in 2018 were subject to an
adjusted ROIC performance measure for a three-year
performance period beginning on the first day of our
2018 fiscal year and extending through the last day of
our 2020 fiscal year, based on the average adjusted
ROIC for each fiscal year within the three-year period.
The average adjusted ROIC was derived from our
three-year financial plan in place at the time of the
award and is calculated as (a) the result of (x) the sum
of (i) our operating income, plus (ii) depreciation and
2021 Proxy Statement
27
EXECUTIVE COMPENSATION
amortization, plus (iii) minimum rentals for 2018 and
single lease cost for 2019 and 2020, minus (y) taxes,
divided by (b) the result of (x) the sum of the averages
of: (i) total assets, excluding any assets associated with
the adoption of new lease accounting standards in
2019, plus (ii) accumulated depreciation and
amortization, minus (y) (i) cash, minus (ii) goodwill,
minus (iii) accounts payable, minus (iv) other payables,
minus (v) accrued liabilities, plus (vi) 8x minimum
rentals for 2018 and 8x single lease cost for 2019 and
2020 (with all of the foregoing terms as determined per
our financial statements for each fiscal year), but
excluding the impact of (a) any costs, fees and
expenses directly related to the consideration,
negotiation, preparation or consummation of any
transaction that results in a change in control (within
the meaning of our 2007 Stock Incentive Plan) or any
security offering; (b) disaster-related charges; (c) any
gains or losses associated with our LIFO computation;
and (d) unless the Compensation Committee disallows
any such item, (i) any unbudgeted loss as a result of
the resolution of a legal matter or (ii) any unplanned
loss(es) or gain(s) related to the implementation of
accounting or tax legislative changes or (iii) any
unplanned loss(es) or gain(s) of a non-recurring nature,
provided that in the case of each of (i), (ii) and
(iii) such amount equals or exceeds $1 million for a
single loss or net loss or gain, as applicable, and
$10 million in the aggregate. For 2020 ROIC, the
Committee disallowed exclusion of the impact of all
losses and gains resulting from COVID-19.
The following tables show the amount (as a percent of
target) of such PSUs that could be earned at each of
the applicable threshold, target and maximum
performance levels, as well as the actual performance
result and the number of such PSUs earned by each
named executive officer eligible to receive a 2018 PSU
award.
Level*
Below Threshold
Threshold
Target
Maximum
2018-2020 Results
Adjusted ROIC (2018-2020)
Result v.
Target (%)
ROIC
Result (%)
PSUs Earned
(% of Target)
<94.8
94.8
100.0
105.2
112.8
<18.30
18.30
19.30
20.30
21.78
0
50
100
300
300.0
*
PSUs earned for performance between threshold, target, and maximum levels are interpolated in a manner similar to that used for our 2020
Teamshare bonus program.
Name
Mr. Vasos
Mr. Garratt
Mr. Owen
Ms. Taylor
Mr. Wenkoff
Mr. Reiser*
2018 – 2020 PSUs Earned (Adjusted ROIC)
61,386
10,743
11,508
10,743
9,975
0
*
Mr. Reiser forfeited the 2018-2020 PSUs upon his departure from Dollar General.
(d) Significant 2021 Annual Equity Award Structure Changes
For the 2021 annual equity grants approved by the Committee in March 2021, the threshold and maximum
performance levels for the adjusted EBITDA performance measure are 85% and 130% of the target level,
respectively, and the corresponding payout percentages at the threshold and maximum performance levels will be
calculated at 25% and 300%, respectively. The Committee believes that these changes to the performance and
payout slopes are appropriate to reduce the impact of uncontrollable swings in performance that could contribute
to downside risk or upside windfall in light of continuing uncertainties in our business arising from the impact of the
COVID-19 pandemic and the resulting difficulty in goal-setting these uncertainties create.
28
2021 Proxy Statement
(e) Share Ownership Guidelines and Holding Requirements
Our senior officers are subject to share ownership guidelines and holding requirements. The share ownership
guideline is a multiple of annual base salary as in effect from time to time and is to be achieved within a five-year
time period.
EXECUTIVE COMPENSATION
Officer Level
CEO
COO
EVP
SVP
Each senior officer is required to retain ownership of
50% of all net after-tax shares issuable upon vesting or
exercise of compensatory awards until the target
ownership level is achieved. As of January 29, 2021,
each of our named executive officers employed with
the Company on that date was in compliance with our
share ownership and holding requirement policy.
(f) Hedging and Pledging Policies
Our policy prohibits Board members, executive officers,
and their Controlled Persons from (1) pledging Dollar
General securities as collateral, (2) holding Dollar
General securities in a margin account, and (3) hedging
against any decrease in the market value of equity
securities awarded by Dollar General and held by them,
such as entering into or trading prepaid variable
forward contracts, equity swaps, collars, puts, calls,
options, exchange funds (also known as swap funds) or
other derivative instruments related to Dollar General
equity securities. All other employees, as well as their
Controlled Persons, are strongly discouraged from
entering into these types of transactions. Controlled
Persons include the Board member’s, executive
officer’s or employee’s respective spouses, immediate
family members sharing their home or that are
economically dependent on them, entities that they
control, and trusts in which they serve as a trustee or
are a beneficiary.
Benefits and Perquisites
Our named executive officers participate in certain
benefits on the same terms that are offered to all of our
salaried employees. We also provide them with limited
additional benefits and perquisites for retention and
recruiting purposes, to replace benefit opportunities
lost due to regulatory limits, and to enhance their
ability to focus on our business. We do not provide tax
gross-up payments for named executive officers on any
benefits and perquisites other than relocation-related
items. The primary additional benefits and perquisites
include the following:
• We provide a compensation deferral plan (the “CDP”)
and, for named executive officers hired or promoted
prior to May 28, 2008, a defined contribution
Multiple of Base Salary
6X
4X
3X
2X
Supplemental Executive Retirement Plan (the “SERP,”
and together with the CDP, the “CDP/SERP Plan”) as
discussed in more detail under “Nonqualified
Deferred Compensation Fiscal 2020”.
• We pay the premiums for a life insurance benefit
equal to 2.5 times base salary up to a maximum of
$4 million.
• We provide a salary continuation program that
provides income replacement for up to 26 weeks at
100% of base salary for the first three weeks and 70%
of base salary thereafter. In addition to the income
replacement benefit, we pay administrative fees
associated with the program. We also pay the
premiums under a group long-term disability plan
that provides 60% of base salary up to a maximum
monthly benefit of $20,000.
• We provide a relocation assistance program under a
policy applicable to officer-level employees.
• We provide personal financial and estate planning
and tax preparation services through a third party.
Employment Agreements and
Severance Arrangements
We have an employment agreement with each of our
named executive officers, each of which has a
three-year term and is subject to certain automatic
extensions. These agreements promote executive
continuity, aid in retention, and, in return for granting
such executives certain severance and other rights
upon a termination of employment, secure valuable
protections for Dollar General, such as non-compete,
non-solicitation, and confidentiality obligations, and
facilitate implementation of our clawback policy.
We believe that reasonable severance benefits are
appropriate to protect the named executive officer
against circumstances over which he or she does not
have control and as consideration for the promises of
non-disclosure, non-competition, non-solicitation, and
non-interference, as well as the clawback rights that we
require in our employment agreements. A change in
control, by itself (“single trigger”), does not trigger any
severance provision applicable to our named executive
officers. As discussed elsewhere in this proxy statement
2021 Proxy Statement
29
EXECUTIVE COMPENSATION
and in “Compensation Decisions Related to Mr. Reiser’s
Departure”, Mr. Reiser left Dollar General in fiscal 2020.
Payments and benefits to him in connection with this
employment separation are itemized under “Potential
Payments to Named Executive Officers Upon
Occurrence of Various Termination Events or Change in
Control as of January 29, 2021” below.
Considerations Associated with
Regulatory Requirements
Under Section 162(m) of the Internal Revenue Code,
we generally may not take a tax deduction for
individual compensation over $1 million paid in any
taxable year to each of the persons that meet the
definition of a covered employee under
Section 162(m). For fiscal 2020, covered employees
include anyone who was a covered employee for any
taxable year beginning after December 31, 2016,
anyone who held the position of CEO or Chief Financial
Officer (“CFO”) at any time during the fiscal year and
the three most highly compensated employees who
acted as executive officers (other than as CEO or CFO)
at any time during the fiscal year. Prior to U.S. tax law
changes in 2017, certain performance-based
compensation was exempt from the Section 162(m)
deduction limit. However, for tax years beginning after
December 31, 2017, the performance-based
compensation exemption was eliminated unless the
compensation qualifies for transition relief applicable to
certain arrangements in place as of November 2, 2017.
The Compensation Committee continues to view the
tax deductibility of executive compensation as one of
many factors to be considered in the context of its
overall compensation philosophy and therefore
reserves the right to approve compensation that may
not be deductible in situations it deems appropriate.
Compensation Committee
Report
The Compensation Committee of our Board of
Directors reviewed and discussed with management
the Compensation Discussion and Analysis required by
Item 402(b) of Regulation S-K and, based on such
review and discussions, the Compensation Committee
recommended to the Board that the Compensation
Discussion and Analysis be included in this document.
This report has been furnished by the members of the
Compensation Committee:
• Patricia D. Fili-Krushel, Chairperson
• Warren F. Bryant
• Timothy I. McGuire
The above Compensation Committee Report does not
constitute soliciting material and should not be deemed
filed or incorporated by reference into any other Dollar
General filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent
Dollar General specifically incorporates this report by
reference therein.
30
2021 Proxy Statement
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes compensation paid to or earned by our named executive officers in each of the
2020, 2019 and 2018 fiscal years. We have omitted from this table the columns for “Bonus” and “Change in Pension
Value and Nonqualified Deferred Compensation Earnings” because they are inapplicable.
Name and Principal Position(1)
Year
Salary
($)(2)
Stock
Awards
($)(3)
Option
Awards
($)(4)
Non-Equity
Incentive Plan
Compensation
($)(5)
All Other
Compensation
($)(6)
Total
($)
Todd J. Vasos,
Chief Executive Officer
John W. Garratt,
Executive Vice President &
Chief Financial Officer
Jeffery C. Owen,
Chief Operating Officer
Rhonda M. Taylor,
Executive Vice President &
General Counsel
Carman R. Wenkoff,
Executive Vice President &
Chief Information Officer
2020 1,341,718 4,403,178 4,544,937
2019 1,283,383 3,996,944 3,927,168
2018 1,188,879 3,805,114 3,793,604
6,075,000
2,708,936
1,717,068
2020
2019
2018
2020
2019
2018
2020
2019
2018
767,284
782,849
807,990
1,736,125
742,091
674,435
662,705
706,511
665,923
663,893
776,709
518,698
823,405 1,076,301 1,110,990
2,484,144
725,972
652,662
774,346 1,058,485
711,314
713,436
605,015
585,150
733,863
699,500
757,484
687,265
569,217
665,923
663,893
880,443
469,697
1,368,961
612,447
409,001
87,990
91,628
97,852
63,620
66,524
63,316
64,017
65,770
60,267
122,695
104,940
117,030
16,452,823
12,008,059
10,602,517
4,157,868
2,922,464
2,618,341
5,558,857
3,505,016
2,607,376
3,588,018
2,689,302
2,425,064
2020
521,559
733,863
757,484
1,180,125
45,394
3,238,425
Jason S. Reiser,
Former Executive Vice President &
Chief Merchandising Officer
2020
2019
2018
455,712
683,087
660,461
674,435
681,725
662,705
664,488
618,317
616,472
—
714,953
477,456
1,618,059
60,331
168,661
3,415,958
2,795,511
2,545,394
(1) Mr. Owen served as Executive Vice President, Store Operations, from June 2015 until his promotion to Chief Operating Officer in August 2019.
Mr. Wenkoff joined Dollar General in July 2017 but was not a named executive officer for 2018 or 2019. Mr. Reiser served as Executive Vice
President and Chief Merchandising Officer until his departure in September 2020.
(2) Each named executive officer deferred under the CDP and contributed to our 401(k) Plan a portion of salary earned in each of the fiscal years
for which salaries are reported above for the applicable named executive officer. The amounts of the fiscal 2020 salary deferrals under the CDP
are included in the Nonqualified Deferred Compensation Table.
(3) The amounts reported represent the aggregate grant date fair value of PSUs awarded in each fiscal year for which compensation is required to
be reported in the table for each named executive officer, in each case computed in accordance with FASB ASC Topic 718. The PSUs are
subject to performance conditions, and the reported value at the grant date is based upon the probable outcome of such conditions on such
date. The values of the PSUs at the grant date assuming that the highest level of performance conditions will be achieved are as follows for
each fiscal year required to be reported for each applicable named executive officer:
Fiscal
Year
2020
2019
2018
Mr. Vasos
($)
13,209,533
11,990,832
11,415,341
Mr. Garratt
($)
2,348,547
2,023,304
1,997,768
Mr. Owen
($)
3,228,904
2,323,039
2,140,307
Ms. Taylor
($)
2,201,589
2,098,501
1,997,768
Mr. Wenkoff
($)
2,201,589
—
—
Mr. Reiser
($)
1,981,384
2,023,304
1,854,951
Information regarding the assumptions made in the valuation of these awards is set forth in Note 9 of the annual consolidated financial
statements in our 2020 Form 10-K.
(4) The amounts reported represent the aggregate grant date fair value of stock options awarded in each fiscal year for which compensation is
required to be reported in the table for each named executive officer, in each case computed in accordance with FASB ASC Topic 718.
Information regarding assumptions made in the valuation of these awards is set forth in Note 9 of the annual consolidated financial statements
in our 2020 Form 10-K.
(5) Represents amounts earned pursuant to our Teamshare bonus program for each fiscal year reported. See the discussion of the “Short-Term
Cash Incentive Plan” in “Compensation Discussion and Analysis” above. Messrs. Vasos, Garratt, Wenkoff and Reiser and Ms. Taylor deferred 10%,
5%, 10%, 7% and 50%, respectively, of his or her fiscal 2020 Teamshare bonus payment reported above under the CDP. Messrs. Vasos, Garratt,
and Reiser and Ms. Taylor deferred 5%, 5%, 7% and 25%, respectively, of his or her fiscal 2019 Teamshare bonus payment reported above under
the CDP. Messrs. Vasos, Garratt and Reiser deferred 5%, 5% and 7%, respectively, of his fiscal 2018 Teamshare bonus payment reported above
under the CDP.
2021 Proxy Statement
31
EXECUTIVE COMPENSATION
(6)
Includes the following amounts for each named executive officer:
Company Match
Contributions –
401(k)
($)
Company Match
Contributions –
CDP
($)
Company
Contributions –
SERP
($)
Premiums for
Life Insurance
Program
($)
Payments/
Accruals in
Connection with
Termination(a)
($)
Aggregate Incremental
Cost of Providing
Perquisites/Personal
Benefits(b)
($)
Name
Mr. Vasos
Mr. Garratt
Mr. Owen
Ms. Taylor
14,448
14,353
14,361
14,332
Mr. Wenkoff
14,253
Mr. Reiser
11,534
52,628
24,005
26,803
15,915
11,754
11,395
—
—
—
91,181
—
—
2,810
1,608
1,725
1,267
1,092
953
—
—
—
—
—
1,582,646
18,104
23,653
21,127
—
18,295
11,531
(a) Represents amounts paid or accrued for fiscal 2020 in connection with Mr. Reiser’s departure from Dollar General.
(b) Perquisites and personal benefits for Ms. Taylor totaled less than $10,000 and accordingly the incremental cost is not included in the
table or detailed in this footnote. None of the named executive officers received any perquisite or personal benefit for which the
aggregate incremental cost individually equaled or exceeded the greater of $25,000 or 10% of total perquisites. The aggregate
incremental cost of providing perquisites and personal benefits to Messrs. Vasos, Garratt, Owen, Wenkoff and Reiser related to:
(1) for each such named executive officer, financial and estate planning services, miscellaneous gifts, premiums paid under our group
long-term disability program and our accidental death and dismemberment policy, and an administrative fee for coverage under our
short-term disability program; (2) for Mr. Garratt, an executive physical medical examination; (3) for Messrs. Garratt and Owen, one
or more directed charitable donations; and (4) for Messrs. Vasos, Owen and Wenkoff, limited entertainment costs. We also provided
each named executive officer with certain perquisites and personal benefits at no aggregate incremental cost to Dollar General,
including access to participation in a group umbrella liability insurance program through a third party vendor at a group rate paid by
the executive and coverage under our business travel accident insurance for which Dollar General pays a flat fee for the eligible
employee population.
32
2021 Proxy Statement
EXECUTIVE COMPENSATION
Grants of Plan-Based Awards in Fiscal 2020
The table below shows each named executive officer’s 2020 Teamshare bonus opportunity under “Estimated
Possible Payouts Under Non-Equity Incentive Plan Awards.” Actual amounts earned under the 2020 Teamshare
program are shown in the Summary Compensation Table and, for those who received such payments, represent
payment for financial performance at the maximum performance level. See “Short-Term Cash Incentive Plan” in
“Compensation Discussion and Analysis” for discussion of such Teamshare program.
The table below also shows information regarding equity awards made to our named executive officers for fiscal
2020, all of which were granted pursuant to our 2007 Stock Incentive Plan. The awards listed under “Estimated
Future Payouts Under Equity Incentive Plan Awards” include the threshold, target, and maximum number of PSUs
which could be earned by each named executive officer based upon the level of achievement of the applicable
financial performance measures. The awards listed under “All Other Option Awards” include nonqualified stock
options that vest over time based upon the applicable named executive officer’s continued employment by Dollar
General. See “Long-Term Equity Incentive Program” in “Compensation Discussion and Analysis” above for further
discussion of these awards. We have omitted from this table the column for “All Other Stock Awards” because it is
inapplicable.
Name
Mr. Vasos
Mr. Garratt
Mr. Owen
Ms. Taylor
Mr. Wenkoff
Mr. Reiser
Estimated Possible Payouts
Under Non-Equity Incentive Plan
Awards
Estimated Future Payouts
Under Equity Incentive Plan
Awards
Grant
Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
—
— 1,012,500 2,025,000 6,075,000
—
—
— 14,247
—
—
—
—
03/17/20
03/17/20
—
03/17/20
03/17/20
—
03/17/20
03/17/20
—
03/17/20
03/17/20
—
03/17/20
03/17/20
—
03/17/20
03/17/20
289,354
—
—
414,024
—
—
228,160
—
—
196,688
—
—
263,774
—
—
578,708 1,736,125
—
—
—
—
828,048 2,484,144
—
—
—
—
456,320 1,368,961
—
—
—
—
393,375 1,180,125
—
—
—
—
527,549 1,582,646
—
—
—
—
—
—
2,533
—
—
3,483
—
—
2,375
—
—
2,375
—
—
2,137
—
—
28,494
—
—
5,066
—
—
6,965
—
—
4,749
—
—
4,749
—
—
4,274
—
—
85,482
—
—
15,198
—
—
20,895
—
—
14,247
—
—
14,247
—
—
12,822
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
Exercise
or Base
Price of
Option
Awards
($/Sh)(1)
Grant
Date Fair
Value of
Stock
and
Option
Awards
($)(2)
—
133,723
—
—
154.53
—
4,544,937
— 4,403,178
—
23,773
—
—
32,688
—
—
22,287
—
—
22,287
—
—
20,058
—
—
154.53
—
—
807,990
782,849
—
154.53
—
1,110,990
— 1,076,301
—
154.53
—
—
154.53
—
—
154.53
—
—
757,484
733,863
—
757,484
733,863
—
681,725
660,461
(1) The per share exercise price was calculated based on the closing market price of one share of our common stock on the date of grant as
reported by the NYSE.
(2) Represents the aggregate grant date fair value of each equity award, computed in accordance with FASB ASC Topic 718. For equity awards
that are subject to performance conditions, the value at the grant date is based upon the probable outcome of such conditions. For
information regarding the assumptions made in the valuation of these awards, see Note 9 of the annual consolidated financial statements
included in our 2020 Form 10-K.
2021 Proxy Statement
33
EXECUTIVE COMPENSATION
Outstanding Equity Awards at 2020 Fiscal Year-End
The table below sets forth information regarding awards granted under our 2007 Stock Incentive Plan and held by
our named executive officers as of the end of fiscal 2020. We have omitted from this table the column for “Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options” because it is inapplicable.
All awards included in the table, to the extent they have not vested, are subject to certain accelerated vesting
provisions as described in “Potential Payments upon Termination or Change in Control.” PSUs reported in the table
are payable in shares of our common stock on a one-for-one basis.
Option Awards
Stock Awards
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(1)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
51,186(6)
42,741(8)
9,961,307
8,317,826
—
—
—
—
—
—
—
—
—
—
—
—
8,637(6)
7,599(8)
1,680,847
1,478,841
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
Name
Grant Date
—
—
28,586(2)
40,378(3)
78,598(3)
76.00
06/03/2025
84.67
03/16/2026
84.67
03/16/2026
70.68
03/22/2027
92.98
03/21/2028
96,297(3)
117.13
03/20/2029
133,723(3)
154.53
03/17/2030
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
68,077(4) 13,248,465
14,070(5)
2,738,163
42,741(7)
8,317,826
84.67
03/16/2026
9,421(3)
70.68
03/22/2027
03/21/2018
13,756(3)
13,754(3)
92.98
03/21/2028
03/20/2019
5,419(3)
16,248(3)
117.13
03/20/2029
23,773(3)
154.53
03/17/2030
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,914(4)
2,318,584
2,374(5)
462,004
7,599(7)
1,478,841
—
—
—
—
—
—
—
—
—
Mr. Vasos
06/03/2015
58,682(2)
03/16/2016
104,599(3)
03/16/2016
57,173(2)
03/22/2017
121,134(3)
03/21/2018
03/20/2019
03/17/2020
03/21/2018
03/20/2019
03/17/2020
78,599(3)
32,101(3)
—
—
—
—
Mr. Garratt
03/16/2016
03/22/2017
32,890(3)
6,127(3)
03/17/2020
03/21/2018
03/20/2019
03/17/2020
Mr. Owen
08/25/2015
03/16/2016
03/22/2017
03/21/2018
03/20/2019
08/27/2019
03/17/2020
03/21/2018
03/20/2019
03/17/2020
—
—
—
—
35,703(9)
32,890(3)
28,265(3)
14,739(3)
6,220(3)
2,408(9)
—
—
—
—
34
2021 Proxy Statement
73.73
08/25/2025
84.67
03/16/2026
9,421(3)
70.68
03/22/2027
14,736(3)
92.98
03/21/2028
18,657(3)
117.13
03/20/2029
7,224(9)
138.75
08/27/2029
32,688(3)
154.53
03/17/2030
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,762(4)
2,483,613
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,726(5)
530,507
9,915(6)
1,929,558
10,449(7)
2,033,480
10,446(8)
2,032,896
Option Awards
Stock Awards
EXECUTIVE COMPENSATION
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
Name
Grant Date
Ms. Taylor
03/16/2016
32,890(3)
—
84.67
03/16/2026
03/22/2017
—
03/21/2018
13,756(3)
03/20/2019
5,619(3)
03/17/2020
03/21/2018
03/20/2019
03/17/2020
Mr. Wenkoff
08/29/2017
03/21/2018
03/20/2019
03/17/2020
03/21/2018
03/20/2019
03/17/2020
Mr. Reiser
—
—
—
—
—
15,517(9)
12,773(3)
5,217(3)
—
—
—
—
—
9,758(3)
13,754(3)
16,851(3)
22,287(3)
70.68
03/22/2027
92.98
03/21/2028
117.13
03/20/2029
154.53
03/17/2030
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,914(4)
2,318,584
2,462(5)
479,130
7,125(7)
1,386,596
10,795(9)
12,772(3)
15,648(3)
22,287(3)
76.89
08/29/2027
92.98
03/21/2028
117.13
03/20/2029
154.53
03/17/2030
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,062(4)
2,152,776
2,286(5)
444,878
7,125(7)
1,386,596
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(1)
—
—
—
—
—
—
—
—
—
—
—
—
8,958(6)
7,122(8)
1,743,316
1,386,012
—
—
—
—
—
—
—
—
—
—
8,316(6)
7,122(8)
1,618,377
1,386,012
—
—
—
—
(1) Computed by multiplying the number of shares or units by the closing market price of one share of our common stock on January 29, 2021 as
reported by the NYSE.
(2) Part of a time-based options grant with a vesting schedule of 33 1/3% per year on each of the third, fourth, and fifth anniversaries of the grant
date.
(3) Part of a time-based options grant with a vesting schedule of 25% per year on each of the first four anniversaries of the April 1 following the
grant date.
(4) Part of a PSU grant, 10% of which were earned as a result of our fiscal 2018 adjusted EBITDA performance and 90% of which were earned as a
result of our fiscal 2018-2020 adjusted ROIC performance, and in each case are scheduled to vest on April 1, 2021.
(5) Part of a PSU grant that was earned as a result of our fiscal 2019 adjusted EBITDA performance and is scheduled to vest 50% per year on each
of April 1, 2021 and April 1, 2022.
(6) Part of a PSU grant that is scheduled to vest on April 1, 2022 if the adjusted ROIC performance goal is achieved for fiscal years 2019-2021. The
number of PSUs reported in this column assumes achievement of the maximum level of adjusted ROIC performance for the performance
period. The actual number of PSUs earned, if any, will be determined based on the actual level of adjusted ROIC performance achieved for the
performance period.
(7) Part of a PSU grant that was earned as a result of our fiscal 2020 adjusted EBITDA performance and is scheduled to vest 33 1/3% per year on
each of the first three anniversaries of the April 1 following the grant date.
(8) Part of a PSU grant that is scheduled to vest on April 1, 2023 if the adjusted ROIC performance goal is achieved for fiscal years 2020-2022. The
number of PSUs reported in this column assumes achievement of the maximum level of adjusted ROIC performance for the performance
period. The actual number of PSUs earned, if any, will be determined based on the actual level of adjusted ROIC performance achieved for the
performance period.
(9) Part of a time-based options grant with a vesting schedule of 25% per year on each of the first four anniversaries of the grant date.
2021 Proxy Statement
35
EXECUTIVE COMPENSATION
Option Exercises and Stock Vested During Fiscal 2020
Name
Mr. Vasos
Mr. Garratt
Mr. Owen
Ms. Taylor
Mr. Wenkoff
Mr. Reiser
Option Awards
Stock Awards
Number of
Shares
Acquired on
Exercise
(#)(1)
Value Realized
on Exercise
($)(2)
Number of
Shares
Acquired on
Vesting
(#)(3)
Value Realized
on Vesting
($)(4)
363,524
46,246,838
31,870
4,881,209
45,000
5,295,286
—
70,587
16,870
52,738
—
8,684,148
2,022,247
6,297,751
6,590
6,850
6,787
2,231
2,274
1,009,324
1,049,146
1,039,497
341,700
348,286
(1) Represents the gross number of option shares exercised, without deduction for shares that may have been surrendered or withheld to satisfy
the exercise price or applicable tax withholding obligations.
(2) Value realized is calculated by multiplying the gross number of options exercised by the difference between the market price of our common
stock at exercise as reported by the NYSE and the exercise price.
(3) Represents the gross number of shares acquired upon vesting of PSUs, without deduction for shares that may have been withheld to satisfy
applicable tax withholding obligations.
(4) Value realized is calculated by multiplying the gross number of shares vested by the closing market price of our common stock on the vesting
date as reported by the NYSE.
Pension Benefits Fiscal 2020
We have omitted the Pension Benefits table because it is inapplicable.
Nonqualified Deferred Compensation Fiscal 2020
Information regarding each named executive officer’s participation in our CDP/SERP Plan is included in the
following table. The material terms of the CDP/SERP Plan are described after the table. Please also see “Benefits
and Perquisites” in “Compensation Discussion and Analysis” above. We have omitted from this table the column
pertaining to “Aggregate Withdrawals/Distributions” during the fiscal year because it is inapplicable.
Name
Mr. Vasos
Mr. Garratt
Mr. Owen
Ms. Taylor
Mr. Wenkoff
Mr. Reiser
Executive
Contributions
in Last FY
($)(1)
Registrant
Contributions
in Last FY
($)(2)
Aggregate
Earnings
in Last FY
($)(3)
202,533
77,200
41,170
52,628
24,005
26,803
78,354
51,995
44,319
Aggregate
Balance at
Last FYE
($)(4)
1,869,071
434,606
366,344
183,363
107,096
176,835
1,296,502
90,617
72,832
11,754
11,395
41,278
46,894
284,743
295,715
(1) Of the reported amounts, the following are reported in the Summary Compensation Table as “Salary” for 2020: Mr. Vasos ($67,086); Mr. Garratt
($38,364); Mr. Owen ($41,170); Ms. Taylor ($30,251); Mr. Wenkoff ($37,820); and Mr. Reiser ($22,786).
(2) Reported as “All Other Compensation” in the Summary Compensation Table.
(3) The amounts shown are not reported in the Summary Compensation Table because they do not represent above-market or preferential
earnings.
(4) Of the amounts reported, the following were previously reported as compensation for years prior to 2020 in a Summary Compensation Table:
Mr. Vasos ($1,276,964); Mr. Garratt ($281,226); Mr. Owen ($207,225); Ms. Taylor ($540,208); Mr. Wenkoff ($0); and Mr. Reiser ($193,024).
36
2021 Proxy Statement
Pursuant to the CDP, each named executive officer may
annually elect to defer up to 65% of his or her base
salary if his or her compensation exceeds the limit set
forth in Section 401(a)(17) of the Internal Revenue
Code, and up to 100% of his or her bonus pay if his or
her compensation equals or exceeds the highly
compensated limit under Section 414(q)(1)(B) of the
Internal Revenue Code. We currently match base pay
deferrals at a rate of 100%, up to 5% of annual salary,
with annual salary offset by the amount of match-
eligible salary under the 401(k) Plan. All named
executive officers are 100% vested in compensation
and matching deferrals and earnings on those deferrals.
Pursuant to the SERP, we make an annual contribution
equal to a certain percentage of a participant’s annual
salary and bonus to eligible participants who are
actively employed in an eligible job grade on January 1
and continue to be employed as of December 31 of a
given year. The contribution percentage is based on
age, years of service, and job grade. Persons hired after
May 27, 2008 are not eligible to participate in the SERP.
The fiscal 2020 contribution percentage was 7.5% for
Ms. Taylor, and she is 100% vested in her SERP account.
No other named executive officer was eligible to
participate in the SERP in 2020.
The amounts deferred or contributed to the CDP/SERP
Plan are credited to a liability account, which is then
invested at the participant’s option in an account that
mirrors the performance of a fund or funds selected by
the Compensation Committee or its delegate. These
funds are identical to the funds offered in our 401(k)
Plan.
For a participant who ceases employment with at least
10 years of service or after reaching age 50 and whose
CDP account balance or SERP account balance exceeds
certain dollar thresholds, the account balance will be
paid by (a) lump sum, (b) monthly installments over a 5,
10 or 15-year period or (c) a combination of lump sum
and installments, pursuant to the participant’s election.
Otherwise, payment is made in a lump sum. The vested
amount will be payable at the time designated by the
CDP/SERP Plan upon the participant’s termination of
employment. A participant’s CDP/SERP Plan benefit
normally is payable in the following February if
employment ceases during the first 6 months of a
calendar year or is payable in the following August if
employment ceases during the last 6 months of a
calendar year. However, participants may elect to receive
an in-service lump sum distribution of vested amounts
credited to the CDP account, provided that the date of
distribution is no sooner than 5 years after the end of
the year in which the amounts were deferred. In
addition, a participant who is actively employed may
request an “unforeseeable emergency hardship”
in-service lump sum distribution of vested amounts
credited to the participant’s CDP account. Account
balances are payable in cash.
EXECUTIVE COMPENSATION
As a result of our change in control which occurred in
2007, the CDP/SERP Plan liabilities through July 6,
2007 were fully funded into an irrevocable rabbi trust.
We also funded into the rabbi trust deferrals into the
CDP/SERP Plan between July 6, 2007 and October 15,
2007. All CDP/SERP Plan liabilities incurred on or after
October 15, 2007 are unfunded.
Potential Payments upon
Termination or Change in
Control
Our agreements with our named executive officers and
certain plans and programs in which such officers
participate, in each case as in effect at the end of our
2020 fiscal year, provide for benefits or payments upon
certain employment termination or change in control
events. We discuss these benefits and payments below
except to the extent they are available generally to all
salaried employees and do not discriminate in favor of
our executive officers or to the extent already
discussed under “Nonqualified Deferred Compensation
Fiscal 2020” above. The discussion of equity awards in
each scenario below includes nonqualified stock
options outstanding as of the end of our 2020 fiscal
year, as well as PSUs awarded in 2018 (“2018 PSUs”),
2019 (“2019 PSUs”) and 2020 (“2020 PSUs”), to each
named executive officer employed by us at the time of
the applicable award. Only Messrs. Vasos and Owen
have outstanding stock options that were awarded
prior to 2016. Because Mr. Reiser’s employment ended
effective September 24, 2020, which was before the
end of our 2020 fiscal year, we discuss below only the
payments and benefits he received or will receive in
connection therewith. Such payments and benefits to
Mr. Reiser, and the treatment of his outstanding equity
awards, are described under “Payments Upon
Involuntary Termination—Involuntary Termination
without Cause” and all other scenarios are inapplicable
to him.
Payments Upon Termination Due to
Death or Disability
Equity Awards
If a named executive officer’s employment with us
terminates due to death or disability (as defined in the
governing agreement):
• Stock Options. Any outstanding unvested stock
option shall become immediately vested and
exercisable with respect to 100% of the underlying
shares immediately prior to such event, and such
vested options may be exercised until the 1st
anniversary of the termination date but no later than
the 10th anniversary of the grant date.
2021 Proxy Statement
37
EXECUTIVE COMPENSATION
• Performance Share Units. Any unearned or unvested
PSUs shall be forfeited and cancelled on the
termination date or the last day of the performance
period, as applicable, except that (1) if the
termination occurs on or after the end of the
applicable one-year or three-year performance
period associated with each of the 2018 PSUs, the
2019 PSUs and the 2020 PSUs but before an
applicable vesting date, any earned but unvested
2018 PSUs, 2019 PSUs and 2020 PSUs shall become
vested and nonforfeitable as of the termination date
but shall be paid at the same time as if no
termination had occurred; (2) for the 2020 PSUs, if
the termination occurs before the end of the
one-year performance period, a pro-rata portion
(based on months employed during such
performance period) of one-third of the 2020 PSUs
subject to the one-year Adjusted EBITDA
performance goal (the “2020 Adjusted EBITDA
PSUs”) earned based on performance during such
performance period shall become vested and
nonforfeitable as of the end of such performance
period and shall be paid at the same time as if no
termination had occurred; and (3) for the 2018 PSUs,
2019 PSUs and 2020 PSUs, if the termination occurs
before the end of the applicable three-year
performance period, a pro-rata portion (based
on months employed during such applicable
performance period) of the 2018 PSUs subject to the
three-year Adjusted ROIC performance goal, of the
2019 PSUs subject to the three-year Adjusted ROIC
performance goal, and of the 2020 PSUs subject to
the three-year Adjusted ROIC performance goal, in
each case earned based on performance during such
applicable performance period shall become vested
and nonforfeitable as of the end of such applicable
performance period and shall be paid at the same
time as if no termination had occurred.
Other Payments
In the event of death, a named executive officer’s
beneficiary will receive payments under our group life
insurance program in an amount, up to a maximum of
$4 million, equal to 2.5 times such officer’s annual base
salary and, in the event of death on or after the last day
of a fiscal year, payment for such officer’s incentive
bonus earned for that fiscal year under the terms of our
Teamshare program (which otherwise generally
requires a participant to remain employed on the
payment date to receive any such bonus). In addition,
in the event of disability (as defined in the governing
document), a named executive officer will receive 60%
of covered monthly earnings up to a $20,000 monthly
benefit under our long-term disability insurance
program. In the event of death or disability (as defined
in the CDP/SERP Plan), a named executive officer’s
CDP/SERP Plan benefit will be payable in a lump sum
within 60 days after the end of the calendar quarter in
38
2021 Proxy Statement
which such termination event occurs, provided that we
may delay payment in the event of disability until as
soon as reasonably practicable after receipt of the
disability determination by the Social Security
Administration. Dependent upon the cause of death or
loss suffered, a named executive officer may also be
eligible to receive payment of up to $50,000 under our
group accidental death and dismemberment program.
Payments Upon Termination Due to
Retirement
Except as provided below with respect to equity
awards, retirement is not treated differently from any
other voluntary termination without good reason (as
discussed below under “Payments Upon Voluntary
Termination”) under any of our plans or agreements for
named executive officers.
Normal Retirement
In the event a named executive officer voluntarily
terminates employment on or after reaching the
minimum age of 62 and achieving five consecutive
years of service with us, provided that the sum of his or
her age plus years of service equals at least 70 and that
there is no basis to terminate the officer with cause (as
defined in the governing agreement) (“Normal
Retirement”):
• Stock Options. The portion of the outstanding
unvested stock options that would have become
vested and exercisable within the one-year period
following the Normal Retirement date if such officer
had remained employed with us shall remain
outstanding for a one-year period following the
Normal Retirement date and shall become vested
and exercisable on the anniversary of the grant date
that falls within such one-year period. However, if
during such one-year period the officer dies or incurs
a disability (as defined in the governing agreement),
such portion shall instead become immediately
vested and exercisable upon such death or disability.
Otherwise, any option which is unvested and
unexercisable on the Normal Retirement date shall
immediately expire without payment. The officer may
exercise the option to the extent vested and
exercisable any time prior to the 5th anniversary of
the Normal Retirement date, but no later than the
10th anniversary of the grant date.
• Performance Share Units. With the exception
outlined below, the vesting and payment of the PSUs
in a Normal Retirement scenario before the end of
the applicable one-year or three-year performance
period and on or after the end of such periods is
identical to the vesting and payment in the death and
disability scenarios discussed above for the PSUs
during these respective time periods. However, if the
Normal Retirement occurs on or after the end of the
one-year performance period but before an
applicable vesting date, the one-third of the 2018
PSUs subject to the Adjusted EBITDA goal (the “2018
Adjusted EBITDA PSUs”), the one-third of the 2019
PSUs subject to the Adjusted EBITDA goal (the “2019
Adjusted EBITDA PSUs”), and the one-third of the
2020 Adjusted EBITDA PSUs, in each case that would
have become vested on the next vesting date shall
become vested and nonforfeitable as of the Normal
Retirement date but shall be paid at the same time as
if no such retirement had occurred. Otherwise, any
unearned or unvested PSUs shall be forfeited and
cancelled on the Normal Retirement date or the last
day of the performance period, as applicable. See
“Payments After a Change in Control” for a
discussion of treatment of the PSUs if a named
executive officer terminates employment due to
Normal Retirement within two years following a
change in control.
Early Retirement
Solely with respect to the stock options awarded to
Mr. Vasos in March 2020 and to the 2020 PSUs awarded
to Mr. Vasos, in the event Mr. Vasos voluntarily
terminates his employment after April 1, 2021, but prior
to Normal Retirement, provided that: (1) he has
provided written notice within a reasonable period of
time prior to such date; (2) he has agreed in writing to
provide reasonable transition services to our Board of
Directors and his successor for up to 12 months
following his voluntary termination; (3) he agrees in
writing to extend the “restricted period” of the Business
Protection Provisions (as defined below under
“Voluntary Termination with Good Reason or After
Failure to Renew the Employment Agreement”)
contained in his employment agreement from
two years to three years from the date of voluntary
termination; and (4) there is no basis to terminate him
with cause (as defined in the governing agreement)
(“Early Retirement”):
• 2020 Stock Options Awarded to Mr. Vasos. Any
outstanding unvested stock options that were
awarded to Mr. Vasos in Mach 2020 shall remain
outstanding following the Early Retirement date and
shall become vested and exercisable on the
scheduled vesting dates as if no such retirement had
occurred. However, if: (1) Mr. Vasos violates any of
the Business Protection Provisions following Early
Retirement, any unvested options shall instead
terminate and be forfeited; (2) Mr. Vasos dies or
incurs a disability (as defined in the governing
document) following Early Retirement, any unvested
options shall instead become immediately vested and
exercisable upon such death or disability; or (3) a
change in control (as defined in the governing
document) occurs following Early Retirement, any
EXECUTIVE COMPENSATION
unvested options shall instead become immediately
vested and exercisable upon such change in control.
Mr. Vasos may exercise the options to the extent
vested and exercisable at any time prior to the 5th
anniversary of the Early Retirement date, but no later
than the 10th anniversary of the grant date.
Notwithstanding the foregoing, if we become aware
of a violation by Mr. Vasos following Early Retirement
of any of the Business Protection Provisions, any
portion of the option that vested following Early
Retirement shall immediately be forfeited and subject
to clawback and any unvested portion of the option
shall immediately be forfeited without payment.
• 2020 PSUs Awarded to Mr. Vasos. Any unearned or
unvested 2020 PSUs awarded to Mr. Vasos shall be
forfeited and cancelled on the Early Retirement date
except that if the Early Retirement occurs after the
end of the one-year performance period, any earned
but unvested 2020 Adjusted EBITDA PSUs shall
remain outstanding and become vested and shall be
paid on the scheduled vesting dates as if no such
retirement had occurred. However, if, following the
Early Retirement and prior to an applicable vesting
date, Mr. Vasos dies or becomes disabled (as
defined in the governing document) or there is a
change in control (as defined in the governing
document), then such earned but unvested 2020
Adjusted EBITDA PSUs instead shall become vested
and nonforfeitable as of such death, disability or
change in control, as applicable, but shall be paid on
the scheduled vesting dates as if no such event had
occurred. Notwithstanding the foregoing, if we
become aware of a violation by Mr. Vasos following
Early Retirement of any of the Business Protection
Provisions, then any of the 2020 Adjusted EBITDA
PSUs that vested following Early Retirement shall
immediately be forfeited and subject to clawback
and any unvested 2020 Adjusted EBITDA PSUs shall
immediately be forfeited. See “Payments After a
Change in Control” for a discussion of treatment of
the 2020 Adjusted EBITDA PSUs awarded to
Mr. Vasos if he terminates employment due to Early
Retirement within two years following a change in
control.
Payments Upon Voluntary
Termination
The payments to be made to a named executive officer
upon voluntary termination vary depending upon
whether the resignation occurs with or without “good
reason” (as defined in the governing agreement) or
after our failure to offer to renew, extend or replace the
applicable employment agreement under certain
circumstances.
2021 Proxy Statement
39
EXECUTIVE COMPENSATION
Voluntary Termination with Good Reason or
After Failure to Renew the Employment
Agreement
If a named executive officer resigns with good reason,
he or she will forfeit all then unvested equity awards
and generally may exercise any outstanding vested
options up to 90 days following the resignation date,
but no later than the 10th anniversary of the grant date.
Solely with respect to the special stock option award
granted to Mr. Vasos on March 16, 2016, Mr. Vasos will
be required to hold any net shares acquired upon
exercise for a period of time ending on the 5th
anniversary of the grant date. If a named executive
officer resigns under the circumstances described in
(2) below, his or her equity will be treated as described
under “Voluntary Termination without Good Reason”
below. See “Payments After a Change in Control” for a
discussion of treatment of equity awards if a named
executive officer resigns with good reason within
two years following a change in control.
If a named executive officer resigns (1) with good
reason after giving 30 days (90 days in the case of
Mr. Vasos) written notice within 30 days after the event
purported to give rise to the claim for good reason and
opportunity for us to cure any such claimed event
within 30 days after receiving such notice, or (2) within
60 days (90 days in the case of Mr. Vasos) of our failure
to offer to renew, extend or replace his or her
employment agreement before, at or within 6 months
(1 year in the case of Mr. Vasos) after the end of the
agreement’s term (unless we enter into a mutually
acceptable severance arrangement or the resignation is
a result of the officer’s retirement or termination other
than for good reason), then in each case the officer will
receive the following benefits generally on or beginning
on the 60th day after termination of employment but
contingent upon the execution and effectiveness of a
release of certain claims against us and our affiliates in
the form attached to the employment agreement:
• Continuation of base salary, generally as in effect
immediately before the termination, for 24 months
payable in accordance with our normal payroll cycle
and procedures.
• A lump sum payment of: (1) for Mr. Vasos, two times
the amount of his annual target bonus under our
annual bonus program for officers in respect of the
fiscal year in which his termination occurs; and (2) for
each other named executive officer, two times the
amount of the average percentage of target bonus
paid to such officer under our annual bonus program
for officers with respect to our two most recently
completed fiscal years (not including a fiscal year for
which the Compensation Committee has not yet
certified financial performance) for which annual
bonuses have been paid to executives under such
program multiplied by such officer’s (A) target bonus
level and (B) base salary (in each case, as applicable
40
2021 Proxy Statement
as of the date immediately preceding the
employment termination or, if the termination is for
good reason due to the reduction of such officer’s
target bonus level or base salary, then his or her
target bonus level and base salary applicable
immediately prior to such reduction). If no bonus was
paid to such officer with respect to one or both of
the applicable fiscal years due to Dollar General’s
performance or to individual performance (as
opposed to ineligibility due to length of
employment), then such bonus amount shall be zero
in calculating the average. If the named executive
officer was not eligible for a bonus with respect to
one of the two applicable fiscal years due to the
length of employment, then such amount shall be
calculated based upon the percentage of target
bonus to such officer for the applicable fiscal year for
which a bonus was paid. If no bonus was paid to the
named executive officer with respect to the
applicable fiscal years due to length of employment,
then no such amount shall be paid.
• Mr. Vasos also will receive a lump sum payment,
payable when annual bonuses are paid to our other
senior executives, of a pro-rata portion of the annual
bonus, if any, that he would have been entitled to
receive for the fiscal year of termination, if such
termination had not occurred, based on our
performance for the fiscal year in which his
employment terminates, multiplied by a fraction, the
numerator of which is the number of days during
which he was employed by us in the fiscal year and
the denominator of which is 365.
• A lump sum payment of two times our annual
contribution that would have been made in respect
of the plan year in which such termination occurs for
the named executive officer’s participation in our
pharmacy, medical, dental and vision benefits
programs.
• Reasonable outplacement services until the earlier of
one year or subsequent employment.
Any amounts owed to a named executive officer in the
form of salary continuation that would otherwise have
been paid during the 60-day period after termination
will instead be payable in a single lump sum on the 60th
day after such termination and the remainder will be
paid in the form of salary continuation payments over
the remaining 24-month period as set forth above.
In certain cases, some or all of the payments and
benefits provided on termination of employment may
be delayed for six months following termination to
comply with the requirements of Section 409A of the
Internal Revenue Code. Any payment required to be
delayed would be paid at the end of the six-month
period in a lump sum, and any payments due after the
six-month period would be paid at the normal payment
date provided for under the applicable employment
agreement.
To the extent permitted by applicable law, in the event
we reasonably believe that the named executive officer
engaged in conduct during employment that would
have resulted in termination for cause, any unpaid
severance amounts under the applicable employment
agreement may be forfeited and we may seek to
recover such portion of any severance amounts paid
under the applicable employment agreement.
The named executive officer will forfeit any unpaid
severance amounts, and we retain any other rights we
have available under law or equity, upon a material
breach of any continuing obligation under the
applicable employment agreement or the release,
which include the following business protection
provisions (the “Business Protection Provisions”):
• The named executive officer must maintain the
confidentiality of, and refrain from disclosing or using,
our (a) trade secrets for any period of time as the
information remains a trade secret under applicable
law and (b) confidential information for a period of
two years following the termination date.
• For a period of two years after the termination date,
the named executive officer may not accept or work
in a “competitive position” within any state in which
we maintain stores at the time of the termination
date or any state in which we have specific plans to
open stores within six months of that date. For this
purpose, “competitive position” means any
employment, consulting, advisory, directorship,
agency, promotional or independent contractor
arrangement between the named executive officer
and any person or entity engaged wholly or in
material part in the business in which we are
engaged (including, but not limited to, those entities
identified in the applicable employment agreement),
or any person or entity then planning to enter the
discount consumable basics retail business, if such
officer is required to perform services which are
substantially similar to those he or she provided or
directed at any time while employed by us.
• For a period of two years after the termination date,
the named executive officer may not actively recruit
or induce any of our exempt employees to cease
employment with us.
EXECUTIVE COMPENSATION
of certain specified events, as may be required by any
applicable law, rule or regulation, by any applicable
national exchange, or by a separate Dollar General
clawback or recoupment policy.
Voluntary Termination without Good Reason
If a named executive officer otherwise resigns without
good reason, he or she will forfeit all then unvested
equity awards and generally may exercise any
outstanding vested options up to 90 days following the
resignation date, but no later than the 10th anniversary
of the grant date. Solely with respect to the special
stock option award granted to Mr. Vasos on March 16,
2016, Mr. Vasos will be required to hold any net shares
acquired upon exercise for a period of time ending on
the 5th anniversary of the grant date.
Payments Upon Involuntary
Termination
The payments to be made to a named executive officer
upon involuntary termination vary depending upon
whether termination is with or without “cause” (as
defined in the governing document).
Involuntary Termination with Cause
Upon an involuntary termination with cause, a named
executive officer will forfeit all unvested equity awards,
all vested but unpaid PSUs and all vested but
unexercised options.
Involuntary Termination without Cause
Upon an involuntary termination without cause, a
named executive officer:
• Will forfeit all then unvested equity awards.
• Generally may exercise any outstanding vested
options up to 90 days following the termination date,
but no later than the 10th anniversary of the grant
date. Solely with respect to the special stock option
award granted to Mr. Vasos on March 16, 2016,
Mr. Vasos will be required to hold any net shares
acquired upon exercise for a period of time ending
on the 5th anniversary of the grant date.
• For a period of two years after the termination date,
• Will receive the same severance payments and
the named executive officer may not solicit or
communicate with any person or entity who has a
business relationship with us and with whom such
officer had contact while employed by us, if it would
likely interfere with our business relationships or
result in an unfair competitive advantage over us.
In addition, each named executive officer’s rights,
payments and benefits with respect to any incentive
compensation (in the form of cash or equity) shall be
subject to any reduction, cancellation, forfeiture or
recoupment, in whole or in part, upon the occurrence
benefits on the same terms and conditions (except
for the notice and cure provisions) as described
under “Voluntary Termination with Good Reason or
After Failure to Renew the Employment Agreement”
above.
In connection with his departure from the Company
effective September 24, 2020 and the execution and
effectiveness of a release of certain claims against us
and our affiliates substantially in the form attached to
his employment agreement, Mr. Reiser was also entitled
to receive, pursuant to an amendment to his employment
2021 Proxy Statement
41
EXECUTIVE COMPENSATION
agreement, an additional lump sum cash payment of
$1,582,646, less applicable withholdings, in exchange
for an extension of the duration of the Business
Protection Provisions to two years and six months.
See “Payments After a Change in Control” for a
discussion of the treatment of equity awards if a
named executive officer is involuntarily terminated
without cause within two years following a change in
control.
Payments After a Change in Control
Equity Awards
• Stock Options Awarded Prior to 2016. A named
executive officer will have one year from his
termination date (but no later than the 10th
anniversary of the grant date) in which to exercise
outstanding vested options that were granted prior
to 2016 if he resigns or is involuntarily terminated
within two years following a change in control (as
defined in the governing document) under any
scenario other than Normal Retirement or involuntary
termination with cause, in which respective cases, he
instead will have five years from the retirement date
(but no later than the 10th anniversary of the grant
date) to exercise such vested options and will forfeit
any vested but unexercised options held at the time
of a termination with cause.
• Other Stock Options and Performance Share Units.
With respect to PSUs, if a change in control (as
defined in the governing document) occurs on or
before the end of an applicable performance period,
and the named executive officer has remained
continuously employed until the change in control,
the target number of the applicable unvested PSUs
shall be deemed earned but otherwise continue to be
subject to the service and payment provisions,
including applicable pro-ration requirements, of the
applicable award agreement, unless the officer
experiences a “qualifying termination.” A change in
control (as defined in the governing document) that
occurs after the end of an applicable performance
period with respect to PSUs, or that occurs at any
time with respect to stock options, will have no effect
upon any such PSUs or such stock options unless the
named executive officer experiences a “qualifying
termination” or, solely with respect to the 2020 PSUs
awarded to Mr. Vasos, a “qualifying early retirement.”
Upon a named executive officer’s “qualifying
termination,” which includes involuntary termination
without cause or resignation with good reason
(unless cause to terminate exists), in each case as
defined in the applicable award agreement, as well as
voluntary resignation due to Normal Retirement
(unless cause to terminate exists) in the case of
PSUs, in each case within two years following a
change in control (provided that the officer was
42
2021 Proxy Statement
continuously employed by us until the change in
control): (1) all of his or her outstanding unvested
options will immediately vest and become
exercisable as to 100% of the shares underlying such
options on the termination date, and the officer may
exercise any outstanding vested options up to
three years following the termination date, but no
later than the 10th anniversary of the grant date; and
(2) all of his or her previously earned, or deemed
earned, but unvested PSUs that have not been
previously forfeited will immediately vest, become
nonforfeitable and be paid on the termination date
subject to a six-month delay if applicable to comply
with Section 409A of the Internal Revenue Code. To
qualify as a resignation with good reason for this
purpose, the officer must have provided written
notice of the existence of the circumstances
providing grounds for resignation with good reason
within 30 days of the initial existence of such grounds
and must have given us at least 30 days from receipt
of such notice to cure such condition. In addition, the
resignation must have become effective no later than
one year after the initial existence of the condition
constituting good reason.
Solely with respect to the 2020 PSUs awarded to
Mr. Vasos, if a change in control occurs after the end
of the one-year performance period and if Mr. Vasos
has been continuously employed by us until the
change in control, then upon his “qualifying early
retirement,” all of his previously earned, or deemed
earned, but unvested 2020 Adjusted EBITDA PSUs
that have not been previously forfeited will
immediately vest, become nonforfeitable and be paid
on the termination date subject to a six-month delay
if applicable to comply with Section 409A of the
Internal Revenue Code. Notwithstanding the
foregoing, if we become aware of a violation by
Mr. Vasos following the qualifying early retirement of
any of the Business Protection Provisions, then any of
the 2020 Adjusted EBITDA PSUs that vested
following the qualifying early retirement shall
immediately be forfeited and subject to clawback. A
“qualifying early retirement” includes a voluntary
termination due to Early Retirement that occurs
within two years after a change in control.
Other Payments
Except as otherwise described above with respect to
equity awards, upon an involuntary termination without
cause or a resignation with good reason following a
change in control (in each case as defined in the
governing document), a named executive officer will
receive the same severance payments and benefits as
described above under “Voluntary Termination with
Good Reason or After Failure to Renew the
Employment Agreement.”
In the event of a change in control as defined in
Section 280G of the Internal Revenue Code, each
named executive officer’s employment agreement
provides for capped payments (taking into
consideration all payments and benefits covered by
such Section 280G) of $1 less than the amount that
would trigger the “golden parachute” excise tax under
federal income tax rules (the “excise tax”) unless he or
she signs a release and the after-tax benefit would be
at least $50,000 more than it would be without capping
the payments. In such case, such officer’s payments
and benefits would not be capped and he or she would
be responsible for the excise tax payment. We would
not pay any additional amount to cover the excise tax.
The table below reflects the uncapped amounts,
subject to reduction in the circumstances described in
this paragraph.
Except for Mr. Reiser, for whom a separate table is
provided below to reflect payments made in 2020 or
which may be made subsequent to 2020 subject to the
conditions outlined above, based upon his termination
scenario (involuntary termination without cause), the
EXECUTIVE COMPENSATION
following table reflects potential payments to each
named executive officer in various termination and
change in control scenarios based on compensation,
benefit and equity levels in effect on, and assuming the
scenario was effective as of, January 29, 2021. For
stock valuations, we have used the closing price of our
stock on the NYSE on January 29, 2021 ($194.61). The
table below reports only amounts that are increased,
accelerated or otherwise paid or owed as a result of the
applicable scenario and, as a result, exclude earned but
unpaid base salary through the employment
termination date and equity awards and CDP/SERP
Plan benefits that had vested prior to the event. For
more information regarding the CDP/SERP Plan
benefits, see “Nonqualified Deferred Compensation
Fiscal 2020” above. The table also excludes any
amounts that are available generally to all salaried
employees and do not discriminate in favor of our
executive officers. Other than with respect to Mr. Reiser,
the amounts shown are merely estimates. We cannot
determine actual amounts to be paid until a
termination or change in control scenario occurs.
2021 Proxy Statement
43
EXECUTIVE COMPENSATION
Potential Payments to Named Executive Officers Upon Occurrence of Various
Termination Events or Change in Control as of January 29, 2021
Name/Item
Mr. Vasos
Equity Vesting Due to Event(1)
Cash Severance
Health Payment
Outplacement(2)
Life Insurance Proceeds
Total
Mr. Garratt
Equity Vesting Due to Event(1)
Cash Severance
Health Payment
Outplacement(2)
Life Insurance Proceeds
Total
Mr. Owen
Equity Vesting Due to Event(1)
Cash Severance
Health Payment
Outplacement(2)
Life Insurance Proceeds
Total
Ms. Taylor
Equity Vesting Due to Event(1)
Cash Severance
Health Payment
Outplacement(2)
Life Insurance Proceeds
Total
Mr. Wenkoff
Equity Vesting Due to Event(1)
Cash Severance
Health Payment
Outplacement(2)
Life Insurance Proceeds
Total
Death
($)(3)
Disability
($)(3)
Retirement
($)(4)
Voluntary
Without Good
Reason
($)
62,673,543 62,673,543
n/a
n/a
n/a
n/a
72,123,543 62,673,543
6,075,000
n/a
n/a
3,375,000
10,649,632 10,649,632
n/a
n/a
n/a
n/a
14,315,757 10,649,632
1,736,125
n/a
n/a
1,930,000
12,835,980 12,835,980
n/a
n/a
n/a
n/a
17,391,124 12,835,980
2,484,144
n/a
n/a
2,071,000
10,614,531 10,614,531
n/a
n/a
n/a
n/a
13,505,492 10,614,531
1,368,961
n/a
n/a
1,522,000
10,199,454 10,199,454
n/a
n/a
n/a
n/a
12,691,579 10,199,454
1,180,125
n/a
n/a
1,312,000
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Involuntary
Without
Cause or
Voluntary
With Good
Reason
($)
n/a
12,825,000
24,145
8,500
n/a
12,857,645
n/a
2,899,208
16,068
8,500
n/a
2,923,775
n/a
3,596,316
24,952
8,500
n/a
3,629,768
n/a
2,286,069
24,249
8,500
n/a
2,318,819
n/a
1,970,727
24,952
8,500
n/a
2,004,179
Involuntary
With Cause
($)
Change in
Control With
Qualifying
Termination
($)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
42,888,323
12,825,000
24,145
8,500
n/a
55,745,968
7,194,526
2,899,208
16,068
8,500
n/a
10,118,301
8,677,943
3,596,316
24,952
8,500
n/a
12,307,711
7,213,527
2,286,069
24,249
8,500
n/a
9,532,345
6,953,748
1,970,727
24,952
8,500
n/a
8,957,927
(1) For the portion of the 2019 and 2020 PSUs that are subject to performance for periods ending after January 29, 2021, the value included in the
Death and Disability columns assumes a maximum payout of 300%, prorated for a death or disability termination scenario occurring on
January 29, 2021.
(2) Estimated based on information provided by our outplacement services provider.
(3)
In addition to the amounts reported above, dependent upon the cause of death or the loss suffered, a named executive officer also may be
eligible to receive payment of up to $50,000 under our group accidental death & dismemberment program.
(4) None of the named executive officers were eligible for retirement (including early retirement for Mr. Vasos) on January 29, 2021.
Payments to Mr. Reiser
Mr. Reiser
Cash Payment for Extension of Business Protection Provisions
Equity Vesting Due to Event
Cash Severance
Health Payment
Outplacement(1)
Life Insurance Proceeds
Total
(1) Estimated based on information provided by our outplacement services provider.
44
2021 Proxy Statement
Payments in Connection
with Termination
($)
1,582,646
n/a
2,642,908
23,005
8,500
n/a
4,257,059
Compensation Committee
Interlocks and Insider
Participation
None of Ms. Fili-Krushel or Messrs. Bryant and McGuire,
each of whom was a member of our Compensation
Committee during all or a portion of 2020: (1) was at
any time during 2020 an officer or employee, or was at
any time prior to 2020 an officer, of Dollar General or
any of our subsidiaries; or (2) had any relationship
requiring disclosure under “Transactions with
Management and Others.” Also, none of our executive
officers serves, or in the past fiscal year has served, as a
director or compensation committee (or equivalent
committee) member of any entity that has an executive
officer serving as a Dollar General director or
Compensation Committee member.
Compensation Risk
Considerations
In March 2021, our Compensation Committee, with
input from its compensation consultant and
management, conducted a risk assessment of our
compensation program for employees, including
executive officers. The assessment included a review of
our compensation programs for certain design features
which could potentially encourage excessive risk-taking
or otherwise create risk to Dollar General. The
Committee concluded, after considering the degree to
which risk-aggravating factors were offset by
risk-mitigating factors, that the net risks created by our
overall compensation program are not reasonably likely
to have a material adverse effect on Dollar General.
Pay Ratio Disclosure
As required by Item 402(u) of Regulation S-K, we are
providing the following information about the
relationship of the annual total compensation of our
employees and our Chief Executive Officer (our “CEO”).
This pay ratio is a reasonable estimate calculated in a
manner consistent with SEC rules based on our payroll
and employment records and the methodology
described below.
EXECUTIVE COMPENSATION
The 2020 annual total compensation of the median
compensated employee (a part-time store associate) of
our temporary, part-time and full-time employee base
who were employed as of the last day of our 2020 fiscal
year (January 29, 2021), other than our CEO, was
$16,688; our CEO’s 2020 annual total compensation
was $16,452,823; and the ratio of these amounts is
1:986.
As of January 29, 2021, our total population, excluding
the CEO, consisted of 152,024 compensated
employees, of which 94 were located in non-U.S.
jurisdictions as follows: Hong Kong (14); China (79);
and Turkey (1). Pursuant to SEC rules, we excluded all
such 94 non-U.S. employees. After applying this
exemption, the employee population used to identify
the median employee consisted of 151,930 temporary,
part-time and full-time employees located solely in the
U.S.
To identify the median compensated employee, we
used W-2 Box 5 Medicare wages for the period from
February 1, 2020 (the first day of our 2020 fiscal year)
through January 29, 2021 (the last day of our 2020
fiscal year), with such amounts annualized for those
permanent employees who did not work for the full
year. Our determination of the median compensated
employee yielded two potential median compensated
employees because the median population we used
had an even number of employees. From the two
employees, we selected as the median compensated
employee the employee who worked more of the year
than the other.
The SEC rules for identifying the median compensated
employee and calculating the pay ratio based on that
employee’s annual total compensation allow companies
to adopt a variety of methodologies, to apply certain
exclusions, and to make reasonable estimates and
assumptions that reflect their compensation practices.
As such, the pay ratio reported by other companies
may not be comparable to the pay ratio reported
above, as other companies may have different
employment and compensation practices and may
utilize different methodologies, exclusions, estimates
and assumptions in calculating their own pay ratios.
2021 Proxy Statement
45
SECURITY OWNERSHIP
The following tables show the amount of our common stock beneficially owned by the listed persons as of
March 12, 2021. For purposes of such tables, a person “beneficially owns” a security if that person has or shares
voting or investment power or has the right to acquire beneficial ownership within 60 days. Unless otherwise noted,
to our knowledge these persons have sole voting and investment power over the shares listed. Percentage
computations are based on 239,264,252 shares of our common stock outstanding as of March 12, 2021.
Security Ownership of Certain Beneficial Owners
The following table pertains to beneficial ownership by those known by us to beneficially own more than 5% of our
common stock.
Name and Address of Beneficial Owner
T. Rowe Price Associates, Inc.(1)
The Vanguard Group(2)
BlackRock, Inc.(3)
Amount and Nature of
Beneficial Ownership
Percent of Class
20,481,800
19,178,414
17,574,737
8.6%
8.0%
7.3%
(1) T. Rowe Price Associates, Inc. has sole power to vote or direct the vote of 7,372,703 shares and sole power to dispose or direct the disposition
of 20,481,800 shares. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202. All information is based
solely on Amendment No. 6 to Statement on Schedule 13G filed on February 16, 2021.
(2) The Vanguard Group, through various subsidiaries, has shared power to vote or direct the vote of 458,349 shares, sole power to dispose or
direct the disposition of 18,044,927 shares, and shared power to dispose or direct the disposition of 1,133,487 shares. The address of The
Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. All information is based solely on Amendment No. 7 to Statement on
Schedule 13G filed on February 10, 2021.
(3) BlackRock, Inc., through various subsidiaries, has sole power to vote or direct the vote of 15,547,412 shares and sole power to dispose or direct
the disposition of 17,574,737 shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. All information is based
solely on Amendment No. 6 to Statement on Schedule 13G filed on January 29, 2021.
46
2021 Proxy Statement
Security Ownership of Officers and Directors
The following table pertains to beneficial ownership of our directors, nominees and named executive officers
individually and to our current directors and all of our current executive officers as a group. These persons may be
contacted at our executive offices.
SECURITY OWNERSHIP
Name of Beneficial Owner
Warren F. Bryant
Michael M. Calbert(3)
Patricia D. Fili-Krushel(4)
Timothy I. McGuire
William C. Rhodes, III(5)
Debra A. Sandler
Ralph E. Santana
Todd J. Vasos
John W. Garratt
Jeffery C. Owen
Rhonda M. Taylor
Carman R. Wenkoff
Jason S. Reiser
All current directors and executive officers
as a group (17 persons)(3)(4)(5)
*
Denotes less than 1% of class.
(1) Share totals have been rounded to the nearest whole share.
Amount and Nature of
Beneficial Ownership(1)(2)
Percent of Class
38,676
108,688
25,671
6,037
49,206
478
—
835,797
110,558
186,227
119,940
67,512
1,805
1,741,434
*
*
*
*
*
*
—
*
*
*
*
*
*
*
(2)
Includes the following number of shares (1) underlying RSUs (including RSUs credited, where applicable, as a result of dividend equivalents
earned with respect to the RSUs) and earned PSUs that are or could be settleable within 60 days of March 12, 2021 over which the person will
not have voting or investment power until the applicable RSUs and PSUs are settled, and (2) subject to options exercisable either currently or
within 60 days of March 12, 2021 over which the person will not have voting or investment power until exercised: Mr. Bryant (2,991 RSUs;
13,013 options); Mr. Calbert (20,979 RSUs; 13,013 options); Ms. Fili-Krushel (956 RSUs; 12,892 options); Mr. McGuire (956 RSUs); Mr. Rhodes
(956 RSUs; 13,013 options); Ms. Sandler (478 RSUs); Mr. Vasos (89,359 PSUs; 626,083 options); Mr. Garratt (15,634 PSUs; 85,850 options);
Mr. Owen (17,608 PSUs; 151,405 options); Ms. Taylor (15,520 PSUs; 80,091 options); Mr. Wenkoff (14,580 PSUs; 50,683 options); and all current
directors and executive officers as a group (30,441 RSUs; 166,266 PSUs; 1,193,776 options). Such shares are considered outstanding for
computing the percentage owned by each named person and by the group but not for any other person. Excludes shares underlying RSUs
that are vested but deferred at the election of Mss. Fili-Krushel and Sandler and Mr. Santana, but over which such persons will not have voting
or investment power until the applicable RSUs are settled on a date that is later than 60 days after March 12, 2021.
(3) Mr. Calbert shares voting and investment power over 51,000 shares with his spouse, Barbara Calbert, as co-trustee of The Michael and Barbara
Calbert 2007 Joint Revocable Trust.
(4) Ms. Fili-Krushel shares voting and investment power over 2,528 shares with her spouse, Kenneth Krushel.
(5) Mr. Rhodes shares voting and investment power over 16,367 shares with his spouse, Amy Rhodes, as power of attorney of The Amy Plunkett
Rhodes Revocable Living Trust, dated July 30, 2014.
2021 Proxy Statement
47
PROPOSAL 2: Advisory Vote to Approve Named Executive
Officer Compensation
In accordance with Section 14A of the Securities
Exchange Act of 1934, as amended, we provide our
shareholders each year with an opportunity to vote on
an advisory basis on the compensation paid to our
named executive officers as disclosed in this proxy
statement pursuant to Item 402 of Regulation S-K.
Accordingly, you may vote on the following resolution
at the annual meeting: “RESOLVED, that the
shareholders approve, on an advisory basis, the
compensation of Dollar General’s named executive
officers as disclosed pursuant to Item 402 of
Regulation S-K, including the Compensation
Discussion and Analysis, the accompanying
compensation tables, and the related narrative
disclosures in this proxy statement.”
As discussed in detail in the “Compensation Discussion
and Analysis” section, the Compensation Committee
actively oversees our executive compensation program,
adopting changes and awarding compensation as
appropriate to reflect Dollar General’s circumstances
and to promote the main objectives of the program.
Our compensation programs are designed to attract,
retain and motivate persons with superior ability, to
reward outstanding performance, and to align the
long-term interests of our named executive officers
with those of our shareholders. Under these programs,
our named executive officers are rewarded for the
achievement of specific annual and long-term goals
and the realization of increased shareholder value.
We firmly believe that the information we have
provided in this proxy statement demonstrates that our
executive compensation program was designed
appropriately and is working to ensure alignment of
management’s and shareholders’ interests to support
long-term value creation. At our 2020 annual meeting
of shareholders, over 92% of shareholder votes were
cast in support of our executive compensation
program.
This vote is not intended to address any specific item
of compensation, but rather the overall compensation
of our named executive officers. This vote also is not a
vote on director compensation, as described under
“Director Compensation,” or on our compensation
policies as they relate to risk management, as
described under “Compensation Risk Considerations”
in the “Executive Compensation” section.
Our Board of Directors is asking our shareholders to
indicate their support for our named executive officer
compensation as described in this proxy statement in
accordance with SEC rules by voting for this proposal.
Because the vote on this proposal is advisory in nature,
it will not affect any compensation already paid or
awarded and will not be binding on or overrule any
decisions by the Compensation Committee or the
Board. Nonetheless, our Board and the Compensation
Committee value our shareholders’ views and intend to
consider the outcome of the vote, along with other
relevant factors, when making future named executive
officer compensation decisions.
FOR
The Board of Directors unanimously recommends that shareholders vote
FOR the approval of the compensation of our named executive officers as
disclosed in this proxy statement.
48
2021 Proxy Statement
AUDIT COMMITTEE REPORT
The Audit Committee of our Board of Directors has:
• reviewed and discussed with management the
audited financial statements for the fiscal year ended
January 29, 2021,
• discussed with Ernst & Young LLP, our independent
registered public accounting firm, the matters
required to be discussed by the applicable
requirements of the Public Company Accounting
Oversight Board and the SEC,
• received the written disclosures and the letter from
Ernst & Young LLP required by applicable
requirements of the Public Company Accounting
Oversight Board regarding the independent
registered public accounting firm’s communications
with the Audit Committee concerning independence,
and
• discussed with Ernst & Young LLP the independence
of Ernst & Young LLP.
Based on these reviews and discussions, the Audit
Committee unanimously recommended to the Board of
Directors that Dollar General’s audited financial
statements be included in the Annual Report on
Form 10-K for the fiscal year ended January 29, 2021
for filing with the SEC.
This report has been furnished by the members of the
Audit Committee:
• William C. Rhodes, III, Chairman
• Warren F. Bryant
• Debra A. Sandler
The above Audit Committee Report does not constitute
soliciting material and should not be deemed filed or
incorporated by reference into any other Dollar General
filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent Dollar
General specifically incorporates this report by
reference therein.
2021 Proxy Statement
49
PROPOSAL 3: Ratification of Appointment of Auditors
Who is responsible for the selection of the
independent auditor?
and level of objectivity and professional skepticism;
reasonableness of fees; and other factors.
The Audit Committee is directly responsible for the
appointment, compensation, retention and oversight of
the independent auditor.
Is the Audit Committee involved in the lead
audit partner selection process?
Yes. Prior to the selection of a lead audit partner, the
Chairman of the Audit Committee, typically one
additional Audit Committee member, and the Chairman
of the Board interview the candidates. Following the
interviews, the Audit Committee discusses each
candidate’s credentials, experience level and
independence prior to making the final selection.
Does the Audit Committee evaluate the
independent auditor and the lead audit
partner?
Yes. The Audit Committee annually evaluates the lead
audit partner, as well as the independent auditor’s
qualifications, performance and independence. The
evaluation, which includes the input of management,
entails consideration of a broad range of factors,
including the quality of services and sufficiency of
resources that have been provided; the skills,
knowledge and experience of the firm and the
audit team; the effectiveness and sufficiency of
communications and interactions; independence
Who has the Audit Committee selected as
the independent auditor?
After conducting the evaluation process discussed
above, the Audit Committee selected Ernst & Young
LLP as our independent auditor for the 2021 fiscal year.
Ernst & Young LLP has served in that capacity since
October 2001. The Audit Committee and the Board of
Directors believe that the continued retention of
Ernst & Young LLP is in the best interests of Dollar
General and our shareholders.
Will representatives of Ernst & Young LLP
attend the annual meeting?
Representatives of Ernst & Young LLP have been
requested and are expected to attend the annual
meeting. These representatives will have the
opportunity to make a statement if they so desire and
are expected to be available to respond to appropriate
questions.
What if shareholders do not ratify the
appointment?
The Audit Committee is not bound by a vote either for
or against the firm. If the shareholders do not ratify this
appointment, our Audit Committee will consider that
result in selecting our independent auditor in the future.
FOR
The Board of Directors unanimously recommends that shareholders vote
FOR the ratification of Ernst & Young LLP as our independent auditor for
the 2021 fiscal year.
50
2021 Proxy Statement
FEES PAID TO AUDITORS
The table below lists the aggregate fees for
professional audit services rendered to us by Ernst &
Young LLP for the audit of our consolidated financial
statements for the past two fiscal years and fees billed
for other services rendered by Ernst & Young LLP
Service
Audit Fees(1)
Audit-Related Fees(2)
Tax Fees(3)
All Other Fees(4)
during the past two fiscal years. Information related to
audit fees for 2020 includes amounts billed through
January 29, 2021, and additional amounts estimated to
be billed for the 2020 period for services rendered.
2020 Aggregate Fees Billed ($)
2019 Aggregate Fees Billed ($)
2,704,793
—
2,231,915
6,450
2,700,625
—
1,563,430
7,100
(1) Represents for each fiscal year the aggregate fees billed for professional services for the audit of our annual financial statements and review of
financial statements included in our Forms 10-Q and services that are normally provided in connection with statutory and regulatory filings or
engagements.
(2) Represents for each fiscal year the aggregate fees billed for assurance and related services that are reasonably related to the performance of
the audit or review of our financial statements.
(3) Represents for each fiscal year the aggregate fees billed for professional services for tax compliance, tax advice, and tax planning. 2020 and
2019 fees relate primarily to tax compliance services, which represented $1,903,870 and $1,438,430 in 2020 and 2019, respectively, for work
related to work opportunity tax credit assistance, foreign sourcing offices’ tax compliance, state tax credit assistance, and other federal job
credits. The remaining tax fees for each such year are for tax advisory services related to inventory, as well as income tax advisory services.
(4) Represents for each fiscal year the aggregate fees billed for other products and services, which in each year consisted solely of subscription
fees to an on-line accounting research tool.
The Audit Committee pre-approves all audit and
permissible non-audit services provided by our
independent auditor. Where feasible, the Committee
considers and, when appropriate, pre-approves
services at regularly scheduled meetings after
disclosure by management and the independent
auditor of the nature of the proposed services, the
estimated fees (when available), and their opinions that
the services will not impair the independence of the
independent auditor. The Committee’s Chairman (or
any Committee member if the Chairman is unavailable)
may pre-approve such services between Committee
meetings and must report to the Committee at its next
meeting with respect to all services so pre-approved.
The Committee pre-approved 100% of the services
provided by Ernst & Young LLP during 2020 and 2019.
2021 Proxy Statement
51
PROPOSAL 4: Vote to Approve the 2021 Stock Incentive
Plan
What are shareholders being asked to
approve?
Our Board of Directors is asking you to approve our
2021 Stock Incentive Plan, a copy of which is attached
as Appendix A to this proxy statement. On March 16,
2021, upon the recommendation of our Compensation
Committee, the Board approved the 2021 Stock
Incentive Plan, subject to shareholder approval at the
annual meeting. If approved by shareholders, the 2021
Stock Incentive Plan, which will reserve up to
11,850,000 shares of Dollar General common stock for
issuance, will become effective as of May 26, 2021 and
will replace the Dollar General Corporation Amended
and Restated 2007 Stock Incentive Plan (the “Prior
Plan”). If shareholders do not approve the 2021 Stock
Incentive Plan, we may continue to grant awards under
the Prior Plan through June 1, 2022. The material
features of the 2021 Stock Incentive Plan are
summarized below. The summary is not a complete
description of all provisions of the 2021 Stock Incentive
Plan and is subject to, and qualified in its entirety by,
the provisions of the 2021 Stock Incentive Plan.
Throughout this proposal, we also may refer to the
2021 Stock Incentive Plan as “the plan.”
What will happen to the Prior Plan if
shareholders approve this proposal?
The Prior Plan is the only equity incentive
compensation plan under which we currently have
authority to grant equity incentive awards. As of
March 17, 2021, we had 13,420,491 shares of common
stock remaining available for grants under the Prior
Plan. The closing price of our common stock as
reported on the NYSE on March 17, 2021 was $187.51.
If shareholders approve the 2021 Stock Incentive Plan,
no new awards will be granted under the Prior Plan
after the annual meeting. Awards previously granted
under the Prior Plan will remain outstanding in
accordance with their terms, but none of the remaining
shares of common stock authorized under the Prior
Plan will be transferred to or used under the 2021
Stock Incentive Plan nor will any awards under the Prior
Plan that are forfeited increase the shares available for
awards under the 2021 Stock Incentive Plan.
We may continue to grant awards under the Prior Plan
prior to the annual meeting, however we will reduce the
number of shares of Dollar General common stock that
are reserved under the 2021 Stock Incentive Plan by
one (1) share for every one (1) share that is granted
under the Prior Plan after March 16, 2021 and prior to
the effective date of the 2021 Stock Incentive Plan. We
anticipate granting restricted stock units under the
Prior Plan on May 25, 2021 to each of our
52
2021 Proxy Statement
non-employee Board members (subject to forfeiture if
the vesting requirements are not met, including upon
the Board’s acceptance of a resignation after a failure
to be re-elected at the annual meeting) with an
estimated value of $165,000 per non-employee director,
with the number of units determined based on a
30-day average closing price for a period ending 15
trading days prior to the grant date. Accordingly, the
number of units anticipated to be granted to each
non-employee director currently cannot be determined.
Consistent with historical practice, we may also grant
awards for new hires and promotions under the Prior
Plan prior to the annual meeting. If, as anticipated, the
non-employee director awards are granted on May 25,
2021 and new hire and promotion awards are granted
prior to the annual meeting, the number of shares
remaining available for grants under the Prior Plan will
be lower than the 13,420,491 shares of common stock
disclosed above as remaining available as of March 17,
2021.
Why should shareholders approve this
proposal?
Our Board of Directors believes the 2021 Stock
Incentive Plan is important to our long-term success
and continued growth. The plan is designed to attract
and retain non-employee directors, management and
other key personnel and service providers, to motivate
management personnel to achieve long-range goals,
and to further align the interests of participants in the
plan with those of our shareholders.
As a replacement for the Prior Plan, we believe the
reservation of shares for issuance under the 2021 Stock
Incentive Plan is necessary for Dollar General to
continue to offer a competitive compensation program
that emphasizes pay-for-performance and places a
significant percentage of executive compensation “at
risk.” As discussed further in “Compensation Discussion
and Analysis,” equity awards are a fundamental
component of our executive compensation program
and an integral part of our pay-for-performance
philosophy, and awards under the 2021 Stock Incentive
Plan are intended to promote the long-term financial
interests of Dollar General and our shareholders and to
align management’s interests with those of our
shareholders. Equity awards also comprise a significant
portion of our non-employee director compensation
program as discussed further under “Director
Compensation” in this proxy statement.
If shareholders approve this proposal, we may grant
awards under the 2021 Stock Incentive Plan through
May 25, 2031, subject to continued availability of shares
under the plan.
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
What are some highlights of the 2021 Stock
Incentive Plan?
How does the 2021 Stock Incentive Plan
work?
We believe the 2021 Stock Incentive Plan design,
including the features summarized below, reflects our
commitment to sound practices and effective
management of equity compensation and promotes a
strong alignment with shareholders’ interests:
• No Evergreen Provision. Shares authorized for
issuance under the 2021 Stock Incentive Plan are not
automatically replenished.
• No Liberal Share Recycling. Under the 2021 Stock
Incentive Plan, shares used to pay the exercise price
of a stock option or stock appreciation right (a
“SAR”) or to satisfy tax withholding obligations in
connection with an award will not be added back to
the aggregate plan limit. In addition, the gross
number of shares associated with the exercise of a
stock option or a SAR, and not just the net shares
issued upon exercise, will count against the
aggregate plan limit.
• No Discounted Stock Options or SARs. The 2021
Stock Incentive Plan prohibits the grant of stock
options and SARs with an exercise price that is less
than the fair market value of our common stock on
the grant date.
• No Repricing of Stock Options or SARs. The 2021
Stock Incentive Plan generally prohibits the repricing
of stock options and SARs without shareholder
approval, including cancelling a stock option or SAR
in exchange for another award or for cash when the
per share exercise price exceeds the fair market value
of the underlying shares.
• Limits on Dividends and Dividend Equivalents. The
2021 Stock Incentive Plan prohibits the payment of
dividends or dividend equivalents on stock options
and SARs. The plan also provides that any dividends
or dividend equivalents in connection with any award
subject to performance-based vesting or any
restricted stock unit may only be paid to the extent
the underlying award is earned and vested under the
plan.
• Clawback Provisions. Awards granted under the
2021 Stock Incentive Plan will be subject to forfeiture
or recoupment as may be required by applicable law,
regulation or stock exchange requirement or the
terms of any clawback policy in effect at Dollar
General from time to time. Currently, all executive
officers are subject to the terms of our internal
clawback policy.
• Term of the 2021 Stock Incentive Plan. No awards
may be granted under the 2021 Stock Incentive Plan
more than ten years from the date of shareholder
approval.
A summary of the 2021 Stock Incentive Plan’s
provisions is set forth below. This summary is qualified
in its entirety by reference to the complete text of the
2021 Stock Incentive Plan attached as Appendix A.
Administration. The 2021 Stock Incentive Plan will be
administered by the Compensation Committee (or an
appropriate sub-committee thereof) unless our Board
of Directors determines otherwise. Within this Proposal
4, we refer to the individuals administering the plan as
the “Committee.” Subject to the provisions of the plan,
the Committee has the authority to select participants
to receive awards, to determine the types, terms and
conditions of awards, to amend or waive any term or
condition of an outstanding award agreement, to
establish, amend or waive rules for the plan’s
administration, to interpret provisions of the plan and
award agreements, and make all other determinations
for the administration of the plan and the awards. The
Committee may delegate to our Chief Executive Officer
all or part of its authority under the plan with respect
to awards to employees who are not executive officers.
Shares Subject to the 2021 Stock Incentive Plan.
Subject to approval by shareholders, a total of
11,850,000 shares of common stock is reserved for
awards which may be issued under the 2021 Stock
Incentive Plan; provided, however, that such reserve will
be reduced by one (1) share for every one (1) share
that is granted under the Prior Plan after March 16,
2021 and prior to the effective date of the 2021 Stock
Incentive Plan.
In general, if any award granted under the 2021 Stock
Incentive Plan terminates, is forfeited, expires or lapses
for any reason other than as a result of exercise or
settlement, or if shares issued pursuant to an award are
forfeited, the shares associated with such award will be
available for future awards under the plan. In contrast,
any shares withheld by the Company, delivered by the
participant, or otherwise used to pay the exercise price
of a stock option or SAR or to satisfy tax withholding
obligations associated with an award will not be
available for future awards under the plan. Further, in
the event shares are delivered or withheld pursuant to
the exercise of a stock option or SAR, the number of
shares available for future awards under the plan will be
reduced by the gross number of shares to which the
exercise relates, rather than the net number of new
shares issued upon the exercise.
Eligibility. The 2021 Stock Incentive Plan provides that
awards may be granted to non-employee directors of
the Company and to key employees and consultants of
the Company and certain of our subsidiaries as
determined by the Committee in its discretion. Key
employees include officers or other employees who, in
the opinion of the Committee, have been or can be
2021 Proxy Statement
53
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
involved in the management, growth, profitability or
protection of, or have performed or can perform
services of importance to, the Company or certain of
our subsidiaries. Consultants include certain individuals
providing bona fide consulting or advisory services to
the Company or certain of our subsidiaries. If
shareholders approve this proposal, approximately
2,410 employees and seven non-employee directors
would be eligible to receive awards under the plan as of
March 17, 2021, based on our historic compensation
practices. While the number of potentially eligible
consultants is not known with specificity, no
consultants received awards under the Prior Plan, and
we have no current plans to make any future awards to
consultants under the 2021 Stock Incentive Plan.
Non-Employee Director Award Limit. From time to
time, our Board of Directors (or if delegated by the
Board and allowed by law and by the exchange on
which our common stock is listed, the Committee)
establishes the form and amount of compensation for
our non-employee directors in its discretion and
pursuant to the exercise of its business judgment,
taking into account such factors, circumstances and
considerations as it determines relevant. However, the
sum of any cash compensation paid outside of, and the
grant date fair value of awards granted under, the 2021
Stock Incentive Plan during a given fiscal year to a
non-employee director for service as a non-employee
director may not exceed $750,000. The Board (or the
Committee, if applicable) may make exceptions to this
limit for individual non-employee directors in
extraordinary circumstances, provided that the
non-employee director receiving such additional
compensation may not participate in the decision to
award such compensation.
Types of Awards under the 2021 Stock Incentive Plan.
Awards under the 2021 Stock Incentive Plan may be in
the form of stock options, SARs, and other stock-based
awards, including without limitation performance-
based awards.
(a) Stock Options
A stock option entitles the participant to purchase
shares of the Company’s common stock at a stated
exercise price. Stock options granted under the 2021
Stock Incentive Plan may be nonqualified stock options
or incentive stock options, although non-employee
directors and consultants are not eligible to receive
incentive stock options. The total number of shares of
common stock reserved for issuance under the plan
(not to exceed 11,850,000) may be issued pursuant to
the exercise of incentive stock options granted under
the plan. At the time the stock option is granted, the
Committee will determine the exercise period, the
exercise price, vesting requirements, expiration date,
and such other terms, conditions or restrictions on the
grant or exercise of the stock option as the Committee
54
2021 Proxy Statement
deems appropriate. However, the exercise price cannot
be less than 100% of the shares’ fair market value on
the grant date (or, in the case of an incentive stock
option granted to a shareholder who owns more than
10% of our outstanding shares, 110% of the shares’ fair
market value on the grant date) and the expiration date
may not exceed ten years from the grant date (or, in
the case of an incentive stock option granted to a
shareholder who owns more than 10% of our
outstanding shares, five years from the grant date).
Further, the value in incentive stock options, based on
the shares’ fair market value on the grant date, that can
be exercisable for the first time in any calendar year
under the plan or any other similar plan that we
maintain is limited to $100,000 per participant,
provided that if incentive stock options that can be
exercisable for the first time by any participant in any
calendar year exceed such amount, the excess stock
options will be treated as nonqualified stock options to
the extent permitted by law. A participant may pay the
exercise price in cash, by delivery of shares of common
stock having a fair market value at the time of exercise
equal to the exercise price, by the Company
withholding shares otherwise issuable upon the
exercise having a fair market value at the time of
exercise equal to the exercise price, through a “cashless
exercise” involving a broker, or by a combination of
these methods. Holders of stock options will have no
right to vote the shares underlying the stock options
and no right to dividends or dividend equivalents on
the underlying shares but after issuance of the shares
upon exercise of the stock option will have the right to
vote and receive future dividends on such shares.
(b) SARs
A SAR represents the right to receive with respect to a
specified number of shares of the Company’s common
stock an amount equal to the excess of the fair market
value of the shares on the date the SAR is exercised
over the exercise price of the SAR. The Committee will
determine the exercise price, expiration date and any
other terms, conditions and restrictions of the SAR at
the time the SAR is granted. However, the exercise
price cannot be less than 100% of the shares’ fair
market value on the grant date and the expiration date
may not exceed 10 years from the grant date. Payment
of the amount shall be made at the time of exercise in
cash, in shares of common stock valued at the fair
market value on the date of exercise, or in a
combination of these methods as determined by the
Committee. The participant does not pay anything
upon exercise of the SAR (except for required tax
withholding). Holders of SARs will have no right to vote
the shares underlying the SAR and no right to
dividends or dividend equivalents on the underlying
shares but after issuance of shares, if any, in payment of
the SAR upon exercise will have the right to vote and
receive future dividends on such shares.
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
(c) Other Stock-Based Awards
The Committee may grant or sell to participants under
the 2021 Stock Incentive Plan:
• unrestricted shares;
• restricted shares (which are shares that are subject to
forfeiture and may not be transferred by a participant
until certain restrictions established by the
Committee lapse);
• performance-based awards (which are awards that
are subject to forfeiture pending attainment of
performance objectives and any other conditions
established by the Committee); and
• awards that are valued by reference to or are based
on the fair market value, or a number of shares, of
our common stock or are payable in the form of
shares of our common stock (including, without
limitation, restricted stock units (which represent the
right to receive shares of our common stock or the
cash equivalent thereof when certain restrictions
established by the Committee lapse) and
performance share units (which are restricted
stock units that are subject to forfeiture pending
attainment of performance objectives and any other
conditions established by the Committee)).
In this proposal, we sometimes refer to these awards as
“Other Stock-Based Awards.” Subject to the provisions
of the plan, the Committee will determine the form,
terms and conditions of Other Stock-Based Awards,
including the vesting provisions, which may include the
completion of a specified period of service, the
occurrence of an event and/or the attainment of
performance objectives, the periods, if any, during
which the awards are subject to limitations on transfer,
whether such awards will be settled in shares, in cash,
or in a combination of shares and cash, and the time
and manner of payment. Further, for any Other Stock-
Based Award subject to performance-based vesting,
exercisability or other conditions, the Committee will
determine the performance goal(s) and the
performance period(s) during which the performance
goal(s) must be met. Attainment of any performance
goal is subject to the Committee’s certification.
Performance goals may include a threshold level of
performance below which no payment or vesting may
occur, levels of performance at which specified
payments or specified vesting will occur, and a
maximum level of performance above which no
additional payment or vesting will occur. In the
Committee’s sole discretion, if allowed by the award
agreement, the Committee may adjust the
compensation or economic benefit due upon
attainment of performance goals and adjust the
performance goals themselves.
Holders of unrestricted shares will have the right to
vote and to dividends on the shares upon issuance.
Unless otherwise provided in the applicable award
agreement, holders of restricted shares will have the
right to vote the shares upon issuance, including during
any period of restriction, and will have the right to
dividends on the shares which will be accumulated and
paid to the extent the restricted shares vest when the
restrictions established by the Committee lapse. Other
Stock-Based Awards that represent a right will have no
right to vote any shares underlying the award and may
have the right to dividend equivalents on the
underlying shares to the extent the underlying shares
vest, provided that no dividend equivalents will be paid
with respect to an award with performance-based
vesting, exercisability or other conditions except to the
extent such performance-based vesting, exercisability
or other conditions have been satisfied.
Performance Goals under the 2021 Stock Incentive
Plan. Under the 2021 Stock Incentive Plan, at the
Committee’s discretion, a performance goal may be
particular to a participant, and may include or be based
on or derived from, but is not limited to, one or more of
the following performance criteria: (i) earnings and/or
earnings growth (before or after one or more of taxes,
interest, depreciation and/or amortization), operating
earnings and/or operating earnings growth; (ii) return
measures (including but not limited to return on assets,
net assets, capital, invested capital, equity, tangible
equity, tangible common equity, sales, revenue, or
operating revenue); (iii) total shareholder equity;
(iv) operating revenue; (v) book value or book value
growth, book value per share or per common share or
growth in book value per share or per common share;
(vi) tangible book value or tangible book value growth,
tangible book value per share or growth in tangible
book value per share; (vii) asset quality; (viii) dividends
or dividends paid; (ix) diluted or basic earnings per
share or diluted or basic earnings per share growth
(before or after one or more of taxes, interest,
depreciation and/or amortization); (x) net earnings
(either before or after taxes); (xi) share price or
increases therein; (xii) profits or profit growth
(including but not limited to net profit, gross profit,
operating profit, net operating profit, economic profit,
profit margins or other corporate profit measures);
(xiii) cash flow (including but not limited to operating
cash flow, free cash flow (either before or after
dividends), and cash flow return on capital); (xiv) cash
from operations; (xv) operating or other expenses or
growth thereof; (xvi) operating efficiency;
(xvii) shareholder return measures (including but not
limited to total shareholder return, relative total
shareholder return or comparative total shareholder
return); (xviii) net sales or revenues or growth thereof;
(xix) improvement in or attainment of working capital
levels; (xx) improvement in or attainment of expense,
shrink, or inventory levels; (xxi) capital expenditures;
2021 Proxy Statement
55
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
(xxii) costs or cost control measures; (xxiii) regulatory
compliance or ratings; (xxiv) gross, operating or other
margins; (xxv) operating ratio; (xxvi) income or net
income (either before or after taxes); (xxvii) operating
income, net operating income, or core net operating
income; (xxviii) productivity or productivity ratios;
(xxix) satisfactory internal or external audits;
(xxx) improvement of financial ratings;
(xxxi) achievement of balance sheet, income statement
or cash flow objectives; (xxxii) quality measures; (xxxiii)
peer ranking or peer performance based on a public
index or based on a Committee-determined group of
peers; (xxxiv) debt reduction; (xxxv) achievement of
risk management objectives; (xxxvi) achievement of
strategic performance or operating objectives or other
strategic or operating objectives; (xxxvii) achievement
of merger or acquisition objectives; (xxxviii)
implementation, management or completion of critical
projects or processes; (xxxix) market capitalization; (xl)
total enterprise value (market capitalization plus net
debt); (xli) economic value added; (xlii) total economic
return; (xliii) selling, general and administrative
expense; (xliv) debt leverage (debt to capital); (xlv)
market share; (xlvi) customer satisfaction; (xlvii) safety;
(xlviii) environmental, social, diversity or other
corporate responsibility goals; or (xlvix) any
component or components of or derived from the
foregoing (including, without limitation, determination
thereof, in the Committee’s sole discretion, with or
without the effect of discontinued operations and
dispositions of business units or segments;
nonrecurring items; unusual or infrequent items;
non-budgeted items; special charges; costs, fees,
expenses and/or accruals related to any asset sale,
merger, acquisition, reorganization, and/or
restructuring program or related to any offering of the
Company’s common stock or other security; disaster-
related charges; gains or losses associated with the
Company’s LIFO computation; changes in tax law,
accounting principles or other laws or provisions
affecting the Company’s reported results; and/or other
losses, gains or other factor determined by the
Committee). The foregoing criteria may relate to the
Company, one or more of its affiliates or subsidiaries or
one or more of its or their divisions, business units, lines
of business or business segments, or any combination
of the foregoing, and may be measured quarterly,
annually or cumulatively over a period of years or
partial years, all as the Committee shall determine.
Performance goals may be absolute in their terms or
measured against or in relationship to a pre-established
target, the Company’s budget or budgeted results,
previous period results, a market index, a designated
comparison group of other companies comparably,
similarly or otherwise situated, or any combination
thereof.
56
2021 Proxy Statement
Transferability. Unless otherwise permitted by the
Committee, no award granted under the 2021 Stock
Incentive Plan may be sold, transferred, assigned,
pledged, or otherwise encumbered by a participant
other than by will or the laws of descent and
distribution and, for restricted shares, until termination
of the restriction period. No transfer of an award or of
any right or interest in an award may be made for
consideration. No election as to benefits and no
exercise of any award or of rights with respect to any
award may be made during a participant’s lifetime by
anyone other than the participant except by a legal
representative or guardian appointed for or by the
participant or, after a participant’s death, by the
legatees, personal representatives or distributees of the
participant.
Termination of Employment or Service. Nothing
contained in the 2021 Stock Incentive Plan affects our
right to terminate any participant’s employment or
other service relationship at any time or for any reason
nor gives any participant any right to be engaged by or
retained in the service of the Company or any of its
subsidiaries. The plan does not constitute an
inducement or consideration for the employment or
service of any participant nor is it a contract between
the Company or any of its subsidiaries and any
participant. The Committee may provide for no, partial
or full vesting in connection with the termination of a
participant’s employment or service on such basis as it
deems appropriate.
Effect of Change in Control. In the event of a “change
in control” (as defined in the 2021 Stock Incentive
Plan), the Committee, as constituted before the change
in control, in its discretion and without the consent of
the participant, may, as to any outstanding award,
either at the time the award is made or any time
thereafter, subject to compliance with Internal Revenue
Code Section 409A, take any one or more of the
following actions: (i) provide for acceleration of the
vesting, delivery and exercisability of, and the lapse of
time-based and/or performance-based vesting
restrictions with respect to, any such award so that the
award may be exercised or realized in full on or before
a date initially fixed by the Committee; (ii) provide for
the purchase, settlement or cancellation of any such
award, for an amount of cash equal to the amount
which could have been obtained upon the exercise of
the award or realization of a participant’s rights had the
award been currently exercisable or payable;
(iii) provide for the replacement of any such share-
settled award with a cash-settled award; (iv) make such
adjustment to any such award then outstanding as the
Committee deems appropriate to reflect such change
in control and to retain the economic value of the
award; (v) provide that for a period of at least ten
business days prior to the change in control, any stock
options or SARs shall be exercisable, to the extent
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
applicable, as to all shares subject thereto and that
upon the occurrence of the change in control, such
awards shall terminate and be of no further force and
effect; or (vi) cause any such award then outstanding
to be assumed, or new rights substituted therefor, by
the acquiring or surviving corporation in such change
in control. The Committee may take any of the
foregoing actions with respect to any outstanding
award or group or type of awards, and shall not be
required to apply any of the foregoing actions
uniformly to all outstanding awards.
Adjustments for Changes in Capitalization and Similar
Changes. Upon any share dividend, share split, spin-off,
share combination, reclassification, recapitalization,
liquidation, dissolution, reorganization, merger in which
the Company is the surviving corporation, “change in
control” (as defined in the 2021 Stock Incentive Plan),
payment of a dividend (other than a cash dividend paid
as part of a regular dividend program), exchange of
shares or other corporate exchange, change in the
Company’s capital stock, equity restructuring, or other
similar transaction or occurrence that affects the
Company’s equity securities or their value, the
Committee will adjust the number and kind of shares or
other securities to be issued under the plan (under
outstanding awards and awards to be granted in the
future under the plan), adjust the exercise prices
related to outstanding awards, adjust applicable annual
limits on awards which thereafter may be made under
the plan, and/or take such other action (including,
without limitation, providing for the payment of a cash
amount to holders of outstanding awards), in each case
as it deems reasonably necessary to address, on an
equitable basis, the effect of the applicable corporate
event on the plan and any outstanding awards.
Repricing Prohibitions. Other than as provided in the
2021 Stock Incentive Plan in connection with a change
in control as described under “Effect of Change in
Control” above or an event described in “Adjustments
for Changes in Capitalization and Similar Changes”
above, the plan prohibits the repricing of stock options
and SARs without shareholder approval, including:
(1) lowering the exercise price of an outstanding stock
option or SAR; (2) cancelling an outstanding stock
option or SAR when the exercise price exceeds the fair
market value of the underlying shares in exchange for
another award or cash; or (3) taking any other action
that would be treated as a repricing under the rules
and regulations of the primary securities market on
which our common stock is traded.
Clawback of Awards Under the 2021 Stock Incentive
Plan. Awards (including a participant’s rights, payments
and benefits with respect to awards) under the 2021
Stock Incentive Plan will be subject to clawback (i.e.,
reduction, cancellation, forfeiture or recoupment) as
may be required by the SEC or the exchange on which
our common stock is listed, by law, rule or regulation, or
by a separate clawback policy adopted from time to
time by our Board of Directors or the Committee. All
executive officers currently are subject to our separate
internal clawback policy.
Amendments of Awards. The Committee may amend
the terms and conditions of any outstanding awards
(including by substitution) subject to the limits on
repricing and to the extent permitted by the terms of
the 2021 Stock Incentive Plan, except that a
participant’s consent would be required to modify an
outstanding award in a manner that adversely impacts,
other than in a de minimis manner, a participant (other
than adjustments pursuant to a change in control of
Dollar General (as defined in the plan) or pursuant to
certain corporate events affecting our equity securities
or the value of our equity securities or changes made
pursuant to Section 409A or other provision of the
Internal Revenue Code), unless such modification is
provided for or contemplated in the terms of the award
agreement or the plan.
Termination of or Changes to the 2021 Stock Incentive
Plan. Our Board of Directors may terminate, amend,
modify or suspend the 2021 Stock Incentive Plan in any
respect without shareholder approval, unless the
particular amendment or modification: (i) would
increase the aggregate number of shares available for
awards under the plan, decrease the exercise price of
outstanding stock options or SARs, or extend the term
of the plan; or (ii) requires shareholder approval under
the Internal Revenue Code, under the rules and
regulations under Section 16 of the Exchange Act or of
the exchange on which the Company’s common stock
is then listed, by any regulatory body having
jurisdiction with respect thereto, or pursuant to any
other applicable laws, rules, or regulations. Further,
participant consent is required for any termination,
amendment or modification which would adversely
impact a participant, other than in a minimal manner,
with respect to any outstanding awards.
Notwithstanding the foregoing, shareholder approval
and participant consent would not be required for an
amendment or modification in connection with a
“change in control” as discussed under “Effect of
Change in Control” above or a capital adjustment
described under “Adjustments for Changes in
Capitalization and Similar Changes” above, or as may
be required to maintain the exemption under
Rule 16b-3 under the Exchange Act, to not conflict
with any provision of the Internal Revenue Code, or to
conform to local law requirements pertaining to, or
obtain more favorable tax or other treatment for,
participants who reside or work outside the United
States.
Duration of the 2021 Stock Incentive Plan. Unless
terminated sooner by the Board of Directors as
described above, the 2021 Stock Incentive Plan will be
of unlimited duration to facilitate administration of
2021 Proxy Statement
57
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
awards issued under the plan, but no award may be
granted under the plan after May 25, 2031.
What are the federal income tax
consequences of awards granted under the
2021 Stock Incentive Plan?
The federal income tax consequences arising with
respect to awards under the 2021 Stock Incentive Plan
will depend on the type of award. The following
provides only a general description of the application
of federal income tax laws to participants and to Dollar
General of certain awards under the 2021 Stock
Incentive Plan. This discussion is intended for the
information of shareholders considering how to vote at
the annual meeting and not as tax or legal advice to
participants in the 2021 Stock Incentive Plan, as the
consequences may vary with the types of awards
granted, the identity of the participants, and the
method of payment or settlement of an award. The
summary does not address the effects of other federal
taxes (including possible “golden parachute” excise
taxes) or taxes imposed under state, local, or foreign
tax laws. This summary is based on U.S. federal income
tax laws and regulations in effect on the date of this
proxy statement and is not a complete description of
the U.S. federal income tax laws.
Incentive Stock Options. The grant of an incentive
stock option will not be a taxable event for the
participant or for Dollar General. A participant will not
recognize taxable income upon exercise of an incentive
stock option (except that the alternative minimum tax
may apply). If a participant sells or otherwise disposes
of the shares acquired upon exercise of an incentive
stock option after the later of (a) one year from the
date the participant exercised the option and
(b) two years from the grant date of the incentive stock
option, the participant generally will recognize
long-term capital gain or loss equal to the difference
between the amount the participant received in the
disposition and the exercise price of the stock option.
Dollar General will not be entitled to any business
expense deduction with respect to the exercise of an
incentive stock option, except as discussed below.
If a participant sells or otherwise disposes of shares
acquired upon exercise of an incentive stock option
before these holding period requirements are satisfied,
the disposition will constitute a “disqualifying
disposition,” and the participant generally will
recognize ordinary income in the year of disposition
equal to the excess of the fair market value of our
common stock on the date of exercise over the exercise
price of the incentive stock option (or, if less, the excess
of the amount realized on the disposition of the shares
over the exercise price of the stock option). The
balance of the participant’s gain on a disqualifying
disposition, if any, will be taxed as short-term or
long-term capital gain, as the case may be. Dollar
58
2021 Proxy Statement
General will be allowed a business expense deduction
to the extent the participant recognizes ordinary
income, subject to Internal Revenue Code
Section 162(m) limits and certain reporting
requirements.
Special rules govern the tax treatment of the use of
common stock to pay the exercise price of an option.
Accordingly, to the extent any award agreement
permits the use of our common stock to pay for the
exercise price, special rules apply.
Non-Qualified Stock Options. The grant of a
non-qualified stock option will not be a taxable event
for the participant or Dollar General. Upon exercising a
non-qualified option, a participant will recognize
ordinary income in an amount equal to the difference
between the exercise price and the fair market value of
our common stock on the option exercise date. Upon a
subsequent sale or exchange of shares acquired
pursuant to the exercise of a non-qualified option, the
participant will have taxable short-term or long-term
capital gain or loss, as the case may be, in an amount
equal to the difference between the amount realized on
the disposition and the tax basis of the shares of
common stock sold. The tax basis of the shares
generally will be equal to the greater of the fair market
value of the shares on the exercise date or the exercise
price of the stock option.
Dollar General will be entitled to a business expense
deduction in the same amount and generally at the
same time as the participant recognizes ordinary
income, subject to Internal Revenue Code
Section 162(m) limits and certain reporting
requirements.
Special rules govern the tax treatment of the use of
common stock to pay the exercise price of an option.
Accordingly, to the extent any award agreement
permits the use of our common stock to pay for the
exercise price, special rules apply.
Stock Appreciation Rights. A participant generally will
not recognize taxable income upon the grant or vesting
of a SAR. Upon exercising a SAR, a participant will
recognize ordinary income in an amount equal to the
difference between the exercise price and the fair
market value of our common stock on the exercise
date. Dollar General will be entitled to a business
expense deduction in the same amount and generally
at the same time as the participant recognizes ordinary
income, subject to Internal Revenue Code
Section 162(m) limits and certain reporting
requirements.
Other Stock-Based Awards. The Committee may grant
or sell to participants Other Stock-Based Awards, the
form and terms of which will be determined by the
Committee. The federal income tax consequences of
Other Stock-Based Awards will depend on the form
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
and terms of those awards. The summary below
describes the federal income tax consequences of
some of the Other Stock-Based Awards the Committee
has granted or sold or may be likely to grant or sell to
participants.
Unrestricted Shares. Participants who are awarded
unrestricted shares of common stock will be required
to recognize ordinary income in an amount equal to the
fair market value of the shares of our common stock on
the grant date, reduced by the amount, if any, paid for
such shares. Dollar General will be entitled to a
business expense deduction in the same amount and
generally at the same time as the participant
recognizes ordinary income, subject to Internal
Revenue Section 162(m) limits and certain reporting
requirements.
Restricted Shares. A participant who is awarded
restricted shares of common stock will not recognize
taxable income upon the grant of the award, provided
that the shares of common stock are subject to
restrictions (that is, the restricted stock is
nontransferable and subject to a substantial risk of
forfeiture). However, the participant may elect under
Section 83(b) of the Internal Revenue Code to
recognize compensation income in the year of the
award in an amount equal to the fair market value of
the common stock on the grant date (less the purchase
price, if any), determined without regard to the
restrictions. If the participant does not make such a
Section 83(b) election, the fair market value of the
common stock on the date the restrictions lapse (less
the purchase price, if any) will be treated as ordinary
income to the participant and will be taxable as of the
date the restrictions lapse. To the extent dividends are
payable during the restricted period under the
applicable award agreement, any such dividends will be
taxable to the participant at ordinary income tax rates,
unless the participant has elected to be taxed on the
fair market value of the restricted shares upon transfer
by making a Section 83(b) election, in which case they
will thereafter be taxable to the participant as
dividends and will not be deductible by the Company.
Dollar General will be entitled to a business expense
deduction in the same amount and generally at the
same time as the participant recognizes ordinary
income, subject to Internal Revenue Code
Section 162(m) limits and certain reporting
requirements.
Restricted Stock Units and Performance Share Units.
There are generally no federal income tax
consequences to the participant or to Dollar General
upon the grant of a restricted stock unit or
performance share unit or the credit of any dividend
equivalent to the participant’s account. Upon the
participant’s receipt of shares (or cash) at the end of
the restriction period, the participant will recognize
ordinary income equal to the amount of cash and/or
the fair market value of shares issued to such
participant on the payment date. The subsequent
disposition of shares acquired pursuant to a restricted
stock unit or performance share unit will result in
capital gain or loss (based on the difference between
the price received on disposition and the fair market
value of the shares of our common stock at the time of
their distribution). The capital gain tax rate will depend
on a number of factors, including the length of time the
participant held the shares prior to selling them. Dollar
General will be entitled to a business expense
deduction in the same amount and generally at the
same time as the participant recognizes ordinary
income, subject to Internal Revenue Code
Section 162(m) limits and certain reporting
requirements.
Section 409A. The 2021 Stock Incentive Plan is
intended to comply with Section 409A of the Internal
Revenue Code (“Section 409A”) to the extent that such
section would apply to any award under the plan.
Section 409A provides certain requirements for
non-qualified deferred compensation arrangements
with respect to a participant’s deferral and distribution
elections and permissible distribution events. Awards
granted under the 2021 Stock Incentive Plan with a
deferral feature will be subject to the requirements of
Section 409A. If an award is subject to, and fails to
satisfy the requirements of, Section 409A, the recipient
of that award will recognize ordinary income on the
amounts deferred under the award, to the extent
vested, which may be prior to when the compensation
is actually or constructively received. Also, if an award
that is subject to Section 409A fails to comply with the
provisions of Section 409A, Section 409A imposes an
additional 20% federal income tax on compensation
recognized as ordinary income, as well as possible
interest requirements with respect to such amounts,
and will have certain withholding requirements.
Have any awards been granted under the
2021 Stock Incentive Plan prior to the
annual meeting?
No. Participation and the types of awards granted
under the 2021 Stock Incentive Plan are subject to the
discretion of the Committee, and no awards may be
granted under the plan unless shareholders approve
the plan at the annual meeting. No determination has
been made as to the awards, if any, that any individuals
who would be eligible to participate in the plan will be
granted in the future under the plan. As a result, the
benefits or amounts that will be received in the future
by any participant or groups of participants if this
proposal is approved are not currently determinable.
2021 Proxy Statement
59
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
What awards are authorized under the Prior Plan?
The table below sets forth information as of January 29, 2021 about securities authorized for issuance under the
Prior Plan, which is our only compensation plan under which equity securities are currently authorized for issuance.
Equity Compensation Plan Information
Plan category
Equity compensation plans approved by security
holders(1)
Equity compensation plans not approved by security
holders
Total(1)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants
and rights
(a)
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a))
(c)
3,786,370
$104.69
14,363,390
—
3,786,370
—
$104.69
—
14,363,390
(1) Column (a) consists of shares of common stock issuable upon exercise of outstanding options and upon vesting and payment of outstanding
restricted stock units, performance share units and deferred shares, including dividend equivalents accrued thereon, under the Prior Plan.
Restricted stock units, performance share units, deferred shares and dividend equivalents are settled for shares of common stock on a
one-for-one basis and have no exercise price. Accordingly, they have been excluded for purposes of computing the weighted-average exercise
price in column (b). Column (c) consists of shares remaining available for future grants pursuant to the Prior Plan, whether in the form of
options, SARs, stock, restricted stock, restricted stock units, performance share units or Other Stock-Based Awards.
As of March 17, 2021, we had 13,420,491 shares of
common stock remaining available for grants under the
Prior Plan. See also “What will happen to the Prior Plan
if shareholders approve this proposal?” for a discussion
of additional awards expected to be granted under the
Prior Plan prior to the annual meeting. As discussed
above, if the 2021 Stock Incentive Plan is approved by
shareholders, no new awards will be granted under the
Prior Plan after the annual meeting.
What additional information is available regarding equity awards under the Prior Plan?
We attempt to manage the levels of equity dilution and annual share usage when granting equity-based
compensation. The following table provides information regarding our share usage (“burn rate”) for our most
recent three fiscal years for grants awarded under the Prior Plan:
Stock Options Granted
Time-Based Restricted Stock Units Granted
Performance Share Units Granted(1)
Fiscal 2020
Fiscal 2019
Fiscal 2018
673,030
649,139
764,783
190,156
230,577
261,550
240,114
108,584
115,619
Weighted Average Basic Common Shares Outstanding
248,171,000
256,553,000
265,155,000
Annual Burn Rate(2)
0.44%
0.39%
0.43%
(1) Defined as: the earned amount for those performance share units for which performance has been determined and the target amount for all
other performance share units.
(2) Defined as: stock options granted + time-based restricted stock units granted + performance share units granted divided by the year-end
weighted average basic common shares outstanding.
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2021 Proxy Statement
PROPOSAL 4: VOTE TO APPROVE THE 2021 STOCK INCENTIVE PLAN
The table below provides dilution information as of the end of our most recent fiscal year (January 29, 2021) and as
of March 17, 2021, in each case with respect to the Prior Plan, as well as a projection of dilution as of the effective
date of the 2021 Stock Incentive Plan, based on outstanding award and outstanding share data as of March 17,
2021:
As of 01-29-21 As of 03-17-21
Projected as of 05-26-21
Shares Available for Grant (Prior Plan)(1)
14,363,390
13,420,491
Shares Available for Grant (2021 Stock Incentive Plan)(2)
0
0
Stock Options Outstanding (Prior Plan)
2,911,540
3,475,172
0
11,850,000
3,475,172
Weighted Average Exercise Price of Stock Options Outstanding
(Prior Plan)
$
104.69
$
119.20
$
119.20
Weighted Average Remaining Term (Years) of Stock Options
Outstanding (Prior Plan)
Time-Based Restricted Stock Units Outstanding (Prior Plan)
Performance Share Units Outstanding (Prior Plan)
Dilution(3)
7.0
369,871
367,053
7.4
527,341
440,733
7.4
527,341
440,733
7.5%
7.5%
6.8%
(1) No additional awards will be granted under the Prior Plan if the 2021 Stock Incentive Plan is approved by shareholders on May 26, 2021.
(2) The maximum number of shares available for grant under the 2021 Stock Incentive Plan is 11,850,000, which number will be reduced on a one
for one basis by the number of shares awarded under the Prior Plan after March 16, 2021 and prior to the effective date of the 2021 Stock
Incentive Plan. Shares reserved for issuance under the Prior Plan are not available for grant under the 2021 Stock Incentive Plan.
(3) Defined as: stock options outstanding + time-based restricted stock units outstanding + performance share units outstanding + shares
remaining available for grant, divided by common shares outstanding as of the end of the fiscal year (January 29, 2021) of 240.8 million and as
of March 17, 2021 of 239.3 million, respectively.
FOR
The Board of Directors unanimously recommends that shareholders vote
FOR the approval of the 2021 Stock Incentive Plan.
2021 Proxy Statement
61
PROPOSAL 5: Vote to Approve Charter Amendment to
Allow Shareholders Holding 25% of our Common Stock to
Request Special Meetings of Shareholders
What are shareholders being asked to
approve?
Our shareholders do not presently have the right to
request that Dollar General call special meetings of
shareholders (a “Special Meeting Request Right”). Our
Board of Directors approved, and is recommending
that our shareholders approve, an amendment to our
Charter which would enable a Special Meeting Request
Right as described below.
Currently, Article 14 of our Charter allows special
meetings of shareholders to be called only by our
Chairman of the Board, our Chief Executive Officer or
our Board, but not by the shareholders. If shareholders
approve this proposal, special meetings of shareholders
also may be called, subject to applicable provisions of
our Bylaws, upon written request from holders of
record or beneficial owners representing at least 25% of
our outstanding common stock entitled to vote on the
matter(s) to be brought before the proposed meeting
if such owners have fully complied with applicable
Bylaw requirements.
This summary of the proposed Charter amendment is
qualified in its entirety by the text of the proposed
Charter amendment, which is attached as Appendix B
to this proxy statement. Additions of text to our
Charter are indicated in Appendix B by underlining and
deletions of text are struck through.
Why does the Board of Directors
recommend the Charter amendment?
In evaluating the advisability of a Special Meeting
Request Right, the Nominating Committee and our
Board of Directors considered certain principal
positions for and against such a right, shareholder
feedback, trends and best practices in corporate
governance, and market practice. After careful
consideration of this information, the Board determined
that the adoption of a Special Meeting Request Right,
and therefore the Charter amendment described in this
proposal, are appropriate.
Provisions disallowing a Special Meeting Request Right
are intended to serve the best interests of shareholders
as a whole by avoiding the potential for abuse of the
right by a small minority of shareholders for
self-interested actions and the associated substantial
expenses and business disruption. The Board
recognizes that convening a special meeting can result
in substantial expenses to Dollar General and diversion
of significant time and attention of our Board and
management away from their primary focus of
62
2021 Proxy Statement
operating our business and creating long-term
shareholder value. However, the Board also recognizes
that many shareholders consider a Special Meeting
Request Right to be an important corporate
governance practice. To balance these interests, the
Board believes that special meetings should be
extraordinary events held only if a significant minority
of shareholders agrees that the meeting is necessary to
discuss critical, time-sensitive issues that cannot wait
until our next annual meeting.
To better inform the Board’s recommendation, we
sought feedback about a Special Meeting Request
Right from our shareholders during our annual
engagement efforts, including their preferences for the
ownership threshold required to exercise the right.
While our shareholders expressed a variety of
preferences and ranges, either in the engagement or in
their published policies, we found broad support for a
25% ownership threshold, which was a significant
factor in driving the Board’s recommended Charter
amendment.
Additionally, a 25% ownership threshold is consistent
with market practice. As of February 15, 2021,
approximately 58% of the companies included in the
S&P 500 that afford a Special Meeting Request Right
have set the ownership threshold at or greater than
25%. The Board believes that such a threshold, together
with certain procedural requirements described further
below, strikes an appropriate balance between
enhancing shareholder rights, by ensuring that special
meetings can be called to act on extraordinary and
urgent matters, and protecting the long-term interests
of Dollar General and our shareholders, by minimizing
the risk that one or a small minority of shareholder(s)
will pursue special interests that are not aligned with
our shareholders more broadly and cause us to unduly
incur substantial costs and distractions.
We have been notified that a shareholder proponent
intends to present Proposal 6 at the annual meeting,
which is an advisory and non-binding shareholder
proposal asking the Board to take steps to provide
shareholders with a right to call special meetings using
a significantly lower ownership threshold than that
proposed in this Proposal 5. For the reasons outlined
above, as well as below in our Board of Directors’
Statement in Opposition to Proposal 6, the Board
believes that this Proposal 5 is more aligned with
market practice and more appropriately balances the
rights of shareholders with the long-term interests of
Dollar General and our shareholders. We note that this
Proposal 5 is a binding amendment to our Charter
requiring a majority vote of all of our shareholders and,
if approved, will result in shareholders having a Special
Meeting Request Right promptly after the annual
meeting.
When would the Charter amendment
become effective?
If shareholders approve this proposal, we will file the
Charter amendment promptly with the Secretary of
State of the State of Tennessee following the annual
meeting. If this proposal is not approved, our Charter
will not be so amended. Regardless of whether this
proposal is approved, our Board of Directors, our
Chairman of the Board and our Chief Executive Officer
will continue to have the ability to call special meetings
of shareholders when, in the exercise of their fiduciary
duty, they determine appropriate.
If the Charter amendment is approved, how
will it be implemented in the Bylaws?
If shareholders approve this proposal, our Board of
Directors intends to amend the Bylaws to establish the
procedures and conditions of the Special Meeting
Request Right as detailed in Appendix C attached to
this proxy statement and summarized below. These
anticipated Bylaw amendments do not require separate
shareholder action. These provisions could be further
amended in the future by Bylaw amendments adopted
by the Board or our shareholders.
The anticipated Bylaw amendments are intended to
minimize the risk of potential abuse, cost and
distraction, including that which could result from
holding multiple shareholder meetings either within a
short period of time or to consider matters that have
been substantially addressed in the recent past, are
scheduled to be substantially addressed in the near
future or that are not properly within the scope of
shareholder action.
The anticipated Bylaw amendments will require the
Board to call a special meeting of shareholders upon
the written request of one or more record or beneficial
holders who in the aggregate have owned shares
representing at least 25% of our outstanding common
stock continuously for at least one year and who have
complied with the requirements set forth in the Bylaws.
For purposes of determining whether the 25%
ownership threshold is satisfied, “ownership” will
include only those shares of common stock as to which
the person possesses (i) the full voting and investment
rights pertaining to the shares and (ii) the full economic
interest in (including the opportunity for profit from
and risk of loss on) such shares; but will exclude
derivative securities, shares sold in a transaction that
has not been settled or closed, and shares borrowed
for any purpose or purchased pursuant to an
PROPOSAL 5: Vote to Approve Charter Amendment
agreement to resell. Multiple shareholder special
meeting requests will be considered together for
purposes of the 25% ownership threshold if they
identify substantially the same purpose and are dated
and received within 30 days of the earliest dated
request that was properly submitted.
The anticipated Bylaw amendments will provide that to
be in proper form to call a special meeting of
shareholders, the request(s) must include certain
information, including without limitation the purpose(s)
of and reason(s) for the meeting, as well as an
agreement to give prompt notice of any decrease in
the number of shares owned occurring between the
date we receive the request and the date of the special
meeting and an acknowledgement that the request will
be deemed to be revoked should share ownership fall
below the 25% ownership threshold at any time
between the date we receive the request and the date
of the special meeting. The requesting shareholder(s)
will be required to update the information provided in
the request to ensure that it is true and correct as of a
date within 10 business days after the record date for
notice of the special meeting and again as of a date
within five business days prior to such special meeting.
If the conditions of the anticipated Bylaw amendments
are satisfied, we would be required to hold the special
meeting no later than 90 days after the Board
determines the request satisfies the requirements of
the Bylaws, unless one of the itemized exceptions
summarized below is applicable. Business transacted at
the meeting would be limited to the purpose(s) stated
in the shareholder request(s) for a special meeting and
any other matters submitted to the meeting by the
Board.
The anticipated Bylaw amendments will excuse us from
calling the special meeting if: we receive the request(s)
during the period beginning 90 days prior to the first
anniversary date of the preceding annual meeting of
shareholders and ending on the date of the final
adjournment of the next annual meeting; a substantially
similar item was presented at any shareholders’
meeting held within 120 days prior to, or will be
presented at a shareholders’ meeting that has been or
will be called and will be held within 90 days after, our
receipt of the request(s); or two or more shareholder-
requested special meetings have been held within the
12-month period prior to our receipt of the request(s).
The anticipated Bylaw amendments also will excuse us
from calling the special meeting if: the business
specified in the request is not a proper subject for
shareholder action under applicable law, our Charter or
our Bylaws; the request was made in a manner that
violated Regulation 14A under the Exchange Act; or
any information submitted pursuant to our Bylaws by
any requesting shareholder is materially inaccurate.
2021 Proxy Statement
63
PROPOSAL 5: Vote to Approve Charter Amendment
The above summary of the anticipated Bylaw
amendments pertaining to the Special Meeting Request
Right is qualified in its entirety by the text of the
anticipated Bylaw amendments, which is attached as
Appendix C to this proxy statement. Additions of text
to our anticipated Bylaw amendments contained in
Appendix C are indicated by underlining and deletions
of text are struck through.
FOR
The Board of Directors unanimously recommends that shareholders vote
FOR the approval of the Charter amendment to allow shareholders holding
25% or more of our common stock to request special meetings of
shareholders.
64
2021 Proxy Statement
PROPOSAL 6: Shareholder Proposal Regarding
Shareholders’ Ability to Call Special Meetings of
Shareholders
Introduction and Board of Directors’
Recommendation
John Chevedden (the “Proponent”), located at 2215
Nelson Avenue, No. 205, Redondo Beach, CA 90278,
has notified us that he intends to present at the annual
meeting the shareholder proposal set forth below. The
Proponent has provided us with documentation
indicating that he is the beneficial owner of at least
40 shares of our common stock. The shareholder
proposal will be voted upon at the annual meeting if
the Proponent or his qualified representative is present
at the annual meeting and properly presents the
shareholder proposal for a vote.
Dollar General is not responsible for the accuracy or
content of the shareholder proposal, which is printed
verbatim as received from the Proponent in accordance
with SEC rules, and we have not endeavored to correct
any erroneous statements or typographical errors it
may contain.
AGAINST
The Board of Directors unanimously recommends that shareholders vote
AGAINST Proposal 6 for the reasons set forth in the Board’s Statement in
Opposition, which follows the shareholder proposal.
Shareholder Proposal
Proposal 6-
Adopt a Mainstream Shareholder Right—Shareholder
Ability to Call a Special Meeting
RESOLVED: Shareholders ask our board to take the
steps necessary to amend our bylaws and appropriate
governing documents to give the owners of a total of
10% of our outstanding common stock the power to
call a special shareowner meeting or the lowest percent
allowed by state law.
It is important to have a 10% stock ownership threshold
because Dollar General shareholders lack the right to
act by written consent.
Special shareholder meetings allow shareholders to
vote on important matters, such as electing new
directors that can arise between annual meetings. This
proposal topic won more than 70%- support at
Edwards Lifesciences. This proposal topic also won
78% support at a Sprint annual meeting with 1.7 Billion
yes-votes. Nuance Communications shareholders gave
94%-support to a 2018 shareholder proposal calling for
10% of shareholders to call a special meeting.
Please vote yes:
Adopt a Mainstream Shareholder Right—Shareholder
Ability to Call a Special Meeting
Proposal 6
Board of Directors’ Statement in Opposition
to Proposal 6
Our Board of Directors has carefully considered this
shareholder proposal and believes that it is not in the
best interests of our shareholders for the reasons
outlined below. Accordingly, the Board unanimously
recommends that shareholders vote AGAINST this
Proposal 6 and instead approve the Company’s special
meeting right proposal outlined in Proposal 5.
Our Company’s Special Meeting Right Proposal
Outlined in Proposal 5, as Compared to the
Shareholder Proposal in this Proposal 6, is More
Consistent with Market Practice
We are recommending that our shareholders approve
the Charter amendment described in Proposal 5, which
would enable shareholders who hold, in the aggregate,
at least 25% of our common stock to request a special
meeting of shareholders. A 25% ownership threshold is
consistent with market practice. As of February 15,
2021, 58% of the companies included in the S&P 500
that afford shareholders the right to request a special
meeting have set the ownership threshold for the
exercise of such a right at 25% or greater, while only
17% have adopted a 10% ownership threshold. In
contrast, the shareholder proposal described in this
Proposal 6 asks the Board to take steps to allow
shareholders who hold, in the aggregate, at least 10%
(or the lowest percent allowed by state law) of our
common stock to call special meetings. Because
Tennessee law does not prescribe a minimum
percentage of our common stock to call special
meetings, this shareholder proposal seeks to allow any
individual shareholder to call a special meeting. Our
Board of Directors believes this approach is
inappropriate.
2021 Proxy Statement
65
PROPOSAL 6: Shareholder Proposal
Our Company’s Special Meeting Right Proposal
Outlined in Proposal 5, as Compared to the
Shareholder Proposal in this Proposal 6, More
Appropriately Balances Shareholder Rights with the
Protection of the Long-Term Interests of Dollar
General and our Shareholders
In addition to not aligning with market practice, our
Board of Directors believes that the shareholder
proposal does not strike the appropriate balance
between enhancing shareholder rights and protecting
the long-term interests of Dollar General and our
shareholders. The Board recognizes that some
shareholders consider a Special Meeting Request Right
to be an important corporate governance practice.
However, the Board believes it is also prudent to
balance this right against the risk of abuse that could
cause us to unduly incur substantial costs and
distraction.
Convening a special meeting can result in substantial
expenses to Dollar General and diversion of significant
time and attention of our Board and executive
management away from their primary focus of
operating our business and creating long-term
shareholder value. One or a small minority of
shareholders should not be entitled to cause such
significant expense and distraction to advance their
own special interests which may not be shared more
broadly by shareholders. Accordingly, the Board
believes that special meetings should be extraordinary
events held only if a significant minority of
shareholders is in agreement that a special meeting is
necessary to discuss critical, time-sensitive issues that
cannot wait until our next annual meeting. A failure to
receive 25% support to convene a special meeting is a
strong indicator that the issue is unduly narrow and not
deemed critical by our shareholders generally.
Providing a Special Meeting Request Right at an even
lower threshold risks giving a small number of
shareholders a disproportionate amount of influence
over our affairs, and the lack of any minimum threshold
would allow any shareholder to call a special meeting.
As a result of these considerations and shareholder
feedback, the Board believes that the 25% threshold in
the Company’s special meeting right proposal outlined
in Proposal 5 strikes a more appropriate balance than
the 10% (or lowest percent allowed by state law)
threshold in this shareholder proposal between
ensuring that shareholders have the right to request a
special meeting to act on extraordinary and urgent
matters and minimizing the risk that one or a small
minority of shareholders will pursue special interests
that are not aligned with or in the best interests of the
remaining shareholders and cause Dollar General to
unduly incur substantial costs and distraction.
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2021 Proxy Statement
Dollar General is Committed to Strong and Effective
Corporate Governance Policies and Practices Which
Ensure Accountability and Responsiveness to
Shareholders
Our existing corporate governance policies and
practices demonstrate and promote our accountability
to shareholders. The Board regularly reviews our
policies, taking into account market practices and
trends and shareholder feedback, and takes action
when it is deemed advisable and in the best interests of
Dollar General and our shareholders. Our key
substantive shareholder rights and governance
practices, discussed more extensively elsewhere in this
proxy statement, include:
• Active Shareholder Engagement Program: We
engage with our shareholders to solicit their
feedback regarding issues including risk oversight,
executive compensation and ESG matters and have
taken actions to implement shareholder feedback
when warranted.
• Independent Board Chairman: We maintain separate
Chairman of the Board and CEO positions, and the
Chairman is an independent director.
• Majority-Independent Board: All of our directors are
independent except our CEO, and all three Board
committees are comprised exclusively of
independent directors.
• Strong Director Refreshment and Evaluation
Practices: Of our independent directors, 43% have
joined our Board within the last five years. We
employ a thorough annual written evaluation process
for our Board, each Board committee, and each
individual independent director, which is overseen by
the Nominating Committee.
• Diverse Board: Our Board reflects diversity in
experience, skills, gender, race, age, and country of
origin.
• Annual Elections of the Board: All of our directors
are elected annually by our shareholders.
• Majority Voting: We have a majority voting standard
for the election of directors in uncontested elections
and equal voting rights for all shareholders.
• Proxy Access: Our proxy access right allows
shareholders, or a group of up to 20 shareholders,
holding 3% or more of our common stock for 3 or
more years to include director nominations in our
proxy statement.
• No Supermajority Voting Provisions: Our Charter
and Bylaws do not contain provisions requiring more
than a simple or absolute majority shareholder vote
on any issue.
• No Shareholder Rights Plan: We do not maintain a
shareholder rights plan.
PROPOSAL 6: Shareholder Proposal
• Significant Share Ownership Requirements: We have
significant share ownership requirements for our
Board members and executive management.
Conclusion
In light of our existing policies and practices and the
Company’s special meeting right proposal outlined in
Proposal 5, our Board of Directors believes that the
adoption of the special meeting right requested by this
shareholder proposal will not make a meaningful
difference in our shareholders’ ability to engage with
the Board or influence our business or governance
policies but will risk giving one or a small group of
shareholders a disproportionate amount of influence
over our affairs at substantial cost and distraction to
our Board and management team. Accordingly, the
Board has determined that the Company’s special
meeting right proposal in Proposal 5, and not this
shareholder proposal, is in the long-term best interests
of Dollar General and our shareholders.
AGAINST
The Board of Directors unanimously recommends that shareholders vote
AGAINST Proposal 6.
2021 Proxy Statement
67
SHAREHOLDER PROPOSALS FOR 2022 ANNUAL MEETING
All shareholder proposals and notices discussed below
must be mailed to Corporate Secretary, Dollar General
Corporation, 100 Mission Ridge, Goodlettsville,
Tennessee 37072. Shareholder proposals and director
nominations that are not included in our proxy
materials will not be considered at any annual meeting
of shareholders unless such proposals have complied
with the requirements of our Bylaws.
Shareholder Proposals
To be considered for inclusion in our proxy materials
relating to the 2022 annual meeting of shareholders
(the “2022 Annual Meeting”), eligible shareholders must
submit proposals that comply with Rule 14a-8 under
the Exchange Act and other relevant SEC regulations
for our receipt by December 2, 2021.
New Business at 2022 Annual Meeting
To introduce new business outside of the Rule 14-8
process or to nominate directors (other than a proxy
access nomination, which is described below) at the
2022 Annual Meeting, or to recommend a candidate for
our Nominating Committee’s consideration, you must
deliver written notice to us no earlier than the close of
business on January 26, 2022 and no later than the
close of business on February 25, 2022, and comply
with the advance notice provisions of our Bylaws. If we
do not receive a properly submitted proposal by
February 25, 2022, then the proxies held by our
management may provide the discretion to vote
against such proposal even though the proposal is not
discussed in our proxy materials sent in connection
with the 2022 Annual Meeting.
Proxy Access
Our Bylaws contain proxy access provisions that permit
a shareholder, or a group of up to 20 shareholders,
owning 3% or more of our stock continuously for at
least three years, to nominate and include in our proxy
materials candidates for election as directors. Such
shareholder or group may nominate up to 20% of our
Board, provided that the shareholder or group and the
nominee(s) satisfy the requirements specified in our
Bylaws. In order to be properly brought before our
2022 Annual Meeting, an eligible shareholder’s notice
of nomination of a director candidate pursuant to the
proxy access provisions of our Bylaws must be received
by us no earlier than the close of business on
November 2, 2021 and no later than the close of
business on December 2, 2021, and comply with the
other relevant provisions of our Bylaws pertaining to
proxy access nominees.
68
2021 Proxy Statement
Appendix A
DOLLAR GENERAL CORPORATION
2021 STOCK INCENTIVE PLAN
This Dollar General Corporation 2021 Stock Incentive Plan (the “Plan”) was adopted by the Board of
Directors of Dollar General Corporation, a Tennessee corporation (the “Company”), on March 16, 2021 and is
effective on May 26, 2021 (the “Effective Date”) upon approval of the Plan by the Company’s shareholders. Unless
otherwise defined herein, all capitalized terms shall have the meanings set forth in Section 2. Upon the approval of
the Plan by the Company’s shareholders, no additional awards shall be made under the Company’s Amended and
Restated 2007 Stock Incentive Plan (the “Prior Plan”), although outstanding awards under the Prior Plan shall
remain outstanding in accordance with their terms.
1.
Purpose of the Plan
The Plan is designed:
(a)
to promote the long-term financial interests and growth of the Company and its Subsidiaries by
attracting and retaining management and other personnel and key service providers with the training, experience
and ability to enable them to make a substantial contribution to the success of the Company’s business;
(b)
(c)
to motivate management personnel to achieve long-range goals; and
to further the alignment of interests of Participants with those of the shareholders of the Company
through opportunities for increased stock or stock-based ownership in the Company.
2.
Definitions
As used in the Plan, the following words shall have the following meanings:
(a)
“Affiliate” means, with respect to any Person, any entity directly or indirectly controlling, controlled
by or under common control with such Person.
(b)
“Award” means an award made to a Participant pursuant to the Plan and described in Section 6,
including, without limitation, an award of a Stock Option, Stock Appreciation Right, or Other Stock-Based Award
(as such terms are defined in Section 6), or any combination of the foregoing.
(c)
“Award Agreement” means an agreement, which may consist of one or more documents, any or all
of which may be in electronic format, between the Company and a Participant that sets forth the terms, conditions
and limitations applicable to an Award and which is signed or acknowledged (including a signature or
acknowledgment in electronic format) by an authorized officer of the Company and the Participant; provided that
for an Award with no restrictions, no signature will be required from the Participant. The Company’s Chief
Executive Officer, Chief People Officer, General Counsel, Chairman of the Committee, Chairman of the Board, and
such other directors or officers of the Company as shall be designated by the Committee from time to time are
hereby authorized to execute or acknowledge Award Agreements on behalf of the Company (including a signature
or acknowledgment in electronic format) and to cause Award Agreements to be delivered to each Participant
(including delivery in electronic format).
(d)
“Beneficial Owner” means a “beneficial owner”, as such term is defined in Rule 13d-3 under the
Exchange Act (or any successor rule thereto).
(e)
(f)
“Board” means the Board of Directors of the Company.
A “Change in Control” shall occur upon any of the following events: (i) the sale or disposition, in
one or a series of related transactions, of all or substantially all of the assets of the Company to any Person (or
group of Persons acting in concert) other than any of the Company or its Affiliates (collectively, the “Permitted
2021 Proxy Statement
A-1
Holders”); (ii) any Person (or group of Persons acting in concert), other than the Permitted Holders, is or becomes
the Beneficial Owner (except that a Person shall be deemed to be a “Beneficial Owner” of all shares that any such
Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company (or any entity
which controls the Company), including by way of merger, consolidation, tender or exchange offer or otherwise;
(iii) a reorganization, recapitalization, merger or consolidation (a “Corporate Transaction”) involving the Company,
unless securities representing 50% or more of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the Company or the entity resulting from such Corporate
Transaction (or the parent of such entity) are held subsequent to such transaction by the Person or Persons who
were the Beneficial Owners of the outstanding voting securities entitled to vote generally in the election of
directors of the Company immediately prior to such Corporate Transaction; or (iv) during any rolling twenty-four
(24) month period looking back from any given date, individuals who at the beginning of such period constituted
the Board (together with any new directors whose election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the directors of the Company, then still in
office, who were either directors at the beginning of such period or whose election or nomination for election was
previously so approved (any such director, an “Incumbent Director”) cease for any reason to constitute a majority
of the Board on the date of determination thereof; provided that no individual shall be an Incumbent Director who
is elected or nominated as a director of the Company as a result of an actual or threatened election contest with
respect to directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any
Person other than the Board. For purposes of the Plan, to the extent necessary to comply with the requirements of
Section 409A of the Code, a Change in Control will occur with respect to an Award that is subject to Section 409A
of the Code only if an event described above relating to the Change in Control also constitutes a change in
ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets
of the Company, in each case within the meaning of Treas. Reg. Section 1.409A-3(i)(5).
(g)
“Code” means the United States Internal Revenue Code of 1986, as amended from time to time,
and any regulations promulgated thereunder.
(h)
“Committee” means the committee of the Board appointed by the Company to administer the
Plan, which shall be the Compensation Committee of the Board unless a subcommittee is required as provided
below or unless the Board determines otherwise. All members of the Committee shall be “independent directors”
under applicable listing standards of any national securities exchange or system on which the Common Stock is
then listed or reported if and as required by such listing standards. For actions which require that all of the
members of the Committee constitute “non-employee directors” as defined in Rule 16b-3, or any similar or
successor rule, the Committee may consist of a subcommittee of at least two members meeting such qualifications.
In the event the Board determines that a member of the Committee (or any applicable subcommittee) was not an
“independent director” under applicable listing standards of any national securities exchange or system on which
the Common Stock is then listed or reported and/or was not a “non-employee director” as defined in Rule 16b-3, as
applicable, on the date any Award was made, such determination shall not invalidate the Award and the Award
shall remain valid in accordance with its terms. In the event the Board exercises the authority of the Committee in
connection with the Plan or an Award as contemplated by Section 4(a), the term “Committee” shall refer to the
Board in connection with the Plan or with regard to that Award.
(i)
“Common Stock” or “Share” means the common stock, par value $0.875 per share, of the Company,
which may be authorized but unissued, or issued and reacquired.
(j)
“Consultant” means a natural person who provides bona fide consulting or advisory services to the
Company or its Subsidiaries, provided the services are not in connection with a capital-raising transaction and the
person does not directly or indirectly promote or maintain a market for the Company’s securities.
(k)
“Director Limit” shall have the meaning set forth in Section 3(e) of the Plan.
(l)
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and
any regulations promulgated thereunder.
(m)
“Fair Market Value” of a Share means: (i) the per Share price at the close of business on the
applicable principal U.S. market on the relevant date if it is a trading date or, if not, on the most recent date on
which the Common Stock was traded prior to such date, as reported by the principal national securities exchange
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or system on which such Shares are listed or admitted to trading, or (ii) if there is no public market for the Shares
on such date, the fair market value as determined pursuant to a reasonable method adopted by the Committee in
good faith for such purpose.
(n)
“ISO” means a Stock Option granted pursuant to Section 6(a)(ii) of the Plan which is designated as
an incentive stock option and is intended to meet the requirements of, and qualify for favorable federal income tax
treatment under, Section 422 of the Code (or any successor section thereto).
(o)
“Key Employee” means a natural person, including an officer, in the regular employment of the
Company or any Subsidiary who, in the opinion of the Committee, has or is expected to have involvement in the
management, growth, profitability or protection of some part or all of the business of, or has performed or is
expected to perform services of importance to, the Company or any Subsidiary.
(p)
“Non-Employee Director” means a member of the Board who is not an employee of Dollar General
Corporation or any of its Subsidiaries.
(q)
“Nonqualified Stock Option” means a Stock Option granted pursuant to Section 6(a)(i) of the Plan
that is not intended to be an ISO.
(r)
of the Plan.
“Other Stock-Based Awards” means Other Stock-Based Awards granted pursuant to Section 6(c)
(s)
“Participant” means a Key Employee, Non-Employee Director, or Consultant who has been granted
an Award under the Plan and whose Award remains outstanding.
(t)
“Performance-Based Award” means any Award for which exercise, full enjoyment or receipt thereof
by the Participant is contingent on satisfaction or achievement of the Performance Goal(s) applicable thereto. The
terms and conditions of each Performance-Based Award, including the Performance Goal(s) and Performance
Period, shall be set forth in an Award Agreement or in a subplan of the Plan that is incorporated by reference into
an Agreement.
(u)
“Performance Goal” means one or more performance measures or goals set by the Committee in
its discretion for each grant of a Performance-Based Award. The extent to which such performance measures or
goals are met will determine the amount or value of the Performance-Based Award that a Participant is entitled to
exercise, receive or retain. For purposes of the Plan, a Performance Goal may be particular to a Participant, and
may include or be based on or derived from, but is not limited to, one or more of the following performance
criteria: (i) earnings and/or earnings growth (before or after one or more of taxes, interest, depreciation and/or
amortization), operating earnings and/or operating earnings growth; (ii) return measures (including but not limited
to return on assets, net assets, capital, invested capital, equity, tangible equity, tangible common equity, sales,
revenue, or operating revenue); (iii) total shareholder equity; (iv) operating revenue; (v) book value or book value
growth, book value per share or per common share or growth in book value per share or per common share;
(vi) tangible book value or tangible book value growth, tangible book value per share or growth in tangible book
value per share; (vii) asset quality; (viii) dividends or dividends paid; (ix) diluted or basic earnings per share or
diluted or basic earnings per share growth (before or after one or more of taxes, interest, depreciation and/or
amortization); (x) net earnings (either before or after taxes); (xi) share price or increases therein; (xii) profits or
profit growth (including but not limited to net profit, gross profit, operating profit, net operating profit, economic
profit, profit margins or other corporate profit measures); (xiii) cash flow (including but not limited to operating
cash flow, free cash flow (either before or after dividends), and cash flow return on capital); (xiv) cash from
operations; (xv) operating or other expenses or growth thereof; (xvi) operating efficiency; (xvii) shareholder return
measures (including but not limited to total shareholder return, relative total shareholder return or comparative
total shareholder return); (xviii) net sales or revenues or growth thereof; (xix) improvement in or attainment of
working capital levels; (xx) improvement in or attainment of expense, shrink, or inventory levels; (xxi) capital
expenditures; (xxii) costs or cost control measures; (xxiii) regulatory compliance or ratings; (xxiv) gross, operating
or other margins; (xxv) operating ratio; (xxvi) income or net income (either before or after taxes); (xxvii) operating
income, net operating income, or core net operating income; (xxviii) productivity or productivity ratios;
(xxix) satisfactory internal or external audits; (xxx) improvement of financial ratings; (xxxi) achievement of balance
sheet, income statement or cash flow objectives; (xxxii) quality measures; (xxxiii) peer ranking or peer performance
based on a public index or based on a Committee-determined group of peers; (xxxiv) debt reduction;
(xxxv) achievement of risk management objectives; (xxxvi) achievement of strategic performance or operating
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objectives or other strategic or operating objectives; (xxxvii) achievement of merger or acquisition objectives;
(xxxviii) implementation, management or completion of critical projects or processes; (xxxix) market capitalization;
(xl) total enterprise value (market capitalization plus net debt); (xli) economic value added; (xlii) total economic
return; (xliii) selling, general and administrative expense; (xliv) debt leverage (debt to capital); (xlv) market share;
(xlvi) customer satisfaction; (xlvii) safety; (xlviii) environmental, social, diversity or other corporate responsibility
goals; or (xlix) any component or components of or derived from the foregoing (including, without limitation,
determination thereof, in the Committee’s sole discretion, with or without the effect of discontinued operations and
dispositions of business units or segments; nonrecurring items; unusual or infrequent items; non-budgeted items;
special charges; costs, fees, expenses and/or accruals related to any asset sale, merger, acquisition, reorganization,
and/or restructuring program or related to any offering of Common Stock or other Company security; disaster-
related charges; gains or losses associated with the Company’s LIFO computation; changes in tax law, accounting
principles or other laws or provisions affecting the Company’s reported results; and/or other losses, gains or other
factor determined by the Committee). The foregoing criteria may relate to the Company, one or more of its
Affiliates or Subsidiaries or one or more of its or their divisions, business units, lines of business or business
segments, or any combination of the foregoing, and may be measured quarterly, annually or cumulatively over a
period of years or partial years, all as the Committee shall determine. Performance Goals may include a threshold
level of performance below which no payment or vesting may occur, levels of performance at which specified
payments or specified vesting will occur, and a maximum level of performance above which no additional payment
or vesting will occur. Performance Goals may be absolute in their terms or measured against or in relationship to a
pre-established target, the Company’s budget or budgeted results, previous period results, a market index, a
designated comparison group of other companies comparably, similarly or otherwise situated, or any combination
thereof. The Committee shall determine the Performance Period during which a Performance Goal must be met,
and attainment of Performance Goals shall be subject to certification by the Committee. In the Committee’s sole
discretion, if allowed by the Award Agreement, the Committee may adjust the compensation or economic benefit
due upon attainment of Performance Goals and adjust the Performance Goals themselves.
(v)
“Performance Period” means the time period set by the Committee during which a Performance
Goal must be met in connection with a Performance-Based Award.
(w)
“Period of Restriction” means the period set by the Committee during which restricted Shares are
subject to a substantial risk of forfeiture and/or subject to limitations on transfer or the period during which other
types of Other Stock-Based Awards (including, without limitation, restricted stock units and performance
stock units) are subject to vesting requirements, in each case pursuant to Section 6(c). The relevant restriction may
lapse based on a period of time or after meeting performance criteria specified by the Committee, or both.
(x)
“Person” means “person,” as such term is used for purposes of Section 13(d) or 14(d) of the
Exchange Act.
(y)
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, including any
corresponding subsequent rule or any amendments enacted after the Effective Date.
(z)
“Stock Appreciation Rights” means Stock Appreciation Rights granted pursuant to Section 6(b) of
the Plan.
(aa)
“Stock Options” means Stock Options granted pursuant to Section 6(a) of the Plan.
(bb)
“Subsidiary” means for purposes of ISOs, a corporation at least 50% of the total combined voting
power of all classes of stock of which is owned by the Company, either directly or through one or more of its
Subsidiaries. For purposes of all Awards other than ISOs, “Subsidiary” shall mean any entity in which the Company
has an ownership interest that would be considered a single employer with the Company within the meaning of
Section 414(b) or Section 414(c) of the Code (substituting “at least 50%” for “at least 80%” in determining
ownership or control therein), except to the extent a different definition is required under Section 409A of the
Code.
3.
Shares Subject to the Plan
(a)
Number of Shares. Subject to adjustment as provided for in Sections 8 and 9, a total of 11,850,000
Shares is reserved for Awards which may be issued under the Plan; provided, however, that such reserve will be
reduced by one (1) Share for every one (1) Share that is granted under the Prior Plan after March 16, 2021 and
prior to the Effective Date. The total number of Shares reserved for issuance under the Plan (not to exceed
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11,850,000) may be issued pursuant to the exercise of ISOs granted under the Plan (including Shares issued
pursuant to the exercise of ISOs that are the subject of disqualifying dispositions within the meaning of
Sections 421 and 422 of the Code). Except as provided in Section 3(b), the issuance of Shares in connection with
the exercise of, or as other payment for, Awards under the Plan shall reduce the total number of Shares available for
future Awards under the Plan. No Shares subject to awards made under the Prior Plan shall be available for use
under the Plan.
(b)
Lapsed Awards or Forfeited Shares. If any Award or portion of an Award granted under the Plan
terminates, is forfeited, expires, or lapses for any reason other than by virtue of exercise or settlement of the Award,
or if Shares issued pursuant to Awards or a portion of an Award are forfeited, any Common Stock subject to such
Award (or portion of such Award) again shall be available for the grant of an Award under the Plan.
(c)
Use of Shares as Payment of Exercise Price or Taxes. Shares withheld by the Company, delivered
by the Participant, or otherwise used to pay the exercise price of a Stock Option or of a Stock Appreciation Right
pursuant to the exercise of a Stock Option or a Stock Appreciation Right shall not be available for future Awards
under the Plan. Shares withheld by the Company, delivered by the Participant, or otherwise used to satisfy payment
of withholding taxes associated with an Award shall not be available for future Awards under the Plan. To the
extent Shares are delivered or withheld pursuant to the exercise of a Stock Option or a Stock Appreciation Right,
the number of underlying Shares as to which the exercise related shall be counted against the number of Shares
available for future Awards under the Plan, as opposed to counting only those Shares issued upon exercise.
(d)
No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any
Award thereunder. The Committee shall determine whether cash, other Awards, or other property shall be issued or
paid in lieu of such fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated.
(e)
Non-Employee Director Award Limit. In addition to the provisions set forth in Sections 3(a)-(d), the
Board (or if allowed by law and by the national securities exchange on which the Common Stock is listed and
delegated by the Board, the Committee) may establish compensation for Non-Employee Directors from time to
time, subject to the limitations in the Plan, including the form and amount of all such Non-Employee Director
compensation. The Board (or the Committee, if applicable) shall establish such Non-Employee Director
compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such
factors, circumstances and considerations as it shall deem relevant from time to time, provided that, except as
otherwise provided in this Section 3(e), the sum of any cash compensation paid and the grant date fair value of any
Awards (as determined in accordance with Financial Accounting Standards Board (FASB) Accounting Standards
Codification Topic 718, or any successor provision thereto) granted under the Plan during any fiscal year of the
Company to a Non-Employee Director as compensation for services as a Non-Employee Director may not exceed
$750,000 (the “Director Limit”). The Board (or the Committee, if applicable) may make exceptions to the Director
Limit for individual Non-Employee Directors in extraordinary circumstances, as the Board (or the Committee, if
applicable) may determine in its discretion (and the exercise of such discretion shall be final, conclusive and
binding on all persons), provided that the Non-Employee Director receiving such additional compensation may not
participate in the decision to award such additional compensation.
4.
Administration of the Plan
(a)
Generally. The Plan shall be administered by the Committee, which shall have all powers necessary
or desirable for such administration and which may adopt its own rules of procedure. Any authority granted to the
Committee also may be exercised by the full Board. Subject to Section 10, the Committee shall have the power and
authority to administer, construe and interpret the Plan, to establish, change and waive rules for the Plan’s
administration, and to make any other determinations that it deems necessary or desirable for the administration of
the Plan. The Committee shall have the power and authority to construe and interpret any Award Agreement and
to correct any defect, supply any omission or reconcile any inconsistency in the Plan and any Award Agreement in
the manner and to the extent the Committee deems necessary or desirable. Any such interpretations, rules, and
administration shall be consistent with the basic purposes of the Plan. The Committee shall have the full power and
authority to establish the terms and conditions of any Award consistent with the provisions of the Plan and to
waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting
conditions). At the time an Award is made or amended in accordance with the terms of the Plan, or the terms or
conditions of an Award are changed in accordance with the terms of the Plan or the Award Agreement, the
Committee may provide for limitations or conditions on such Award. Any decision of the Committee (including a
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duly authorized subcommittee thereof) in the interpretation and administration of the Plan or an Award Agreement
shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned
(including, but not limited to, Participants and their beneficiaries or successors). In the event of a conflict or
inconsistency between the Plan and any Award Agreement, the Plan shall govern, and the Award Agreement shall
be interpreted to minimize or eliminate any such conflict or inconsistency. The express grant in the Plan of any
specific power to the Committee shall not be construed as limiting any power or authority of the Committee.
(b)
Substitute Awards. Subject to the limitations imposed under Section 7(h) below, Awards may, in
the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by the Company or its Affiliates or a company acquired by the Company or with which
the Company combines.
(c)
Use of Advisors; Limitation of Liability; Indemnification. The Committee may employ or may
consult with counsel, consultants, accountants, appraisers, brokers or other persons, any of whom also may, but
need not, be advisors to the Company. The Committee, the Company, and the officers and directors of the
Company shall be entitled to rely upon the advice, opinions or valuations of any such persons and shall incur no
liability for any action taken, or any determination or interpretation made, in good faith reliance upon such advice,
opinions or valuations. No member of the Committee, nor employee, director or representative of the Company,
shall be personally liable for any action taken, or determination or interpretation made, in good faith with respect to
the Plan or the Awards. In addition to such other rights of indemnification as they may have as members of the
Committee, employees, directors and representatives of the Company, all such members of the Committee,
employees, directors and representatives shall be fully protected and indemnified to the greatest extent permitted
by applicable law by the Company against reasonable expenses, including attorneys’ fees, actually and reasonably
incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein,
to which they or any of them may be a party by reason of any action taken or failure to act, or any determination or
interpretation, under or in connection with the Plan or any Award granted or made hereunder, in all cases on behalf
of the Company, and against all amounts reasonably paid by them in settlement thereof or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, if such persons acted on behalf of the Company in
good faith and in a manner which they believed to be in, and not opposed to, the best interests of the Company
and its Subsidiaries.
(d)
Rule 16b-3. To the extent required for Awards to be exempt under Rule 16b-3, all Awards shall be
made by members of the Committee who are “non-employee directors” as that term is defined in Rule 16b-3, or by
the Board. Notwithstanding any provision of the Plan to the contrary, the Board or the Committee may impose
such conditions on any Award, and amend the Plan in any such respects, as may be required to satisfy the
requirements of Rule 16b-3.
(e)
Delegation of Authority. The Committee, in its discretion, may delegate administrative duties to
one or more of its members, to an officer of the Company or to any other person or persons selected by it,
provided that the Committee may not delegate the Committee’s authority with respect to non-ministerial actions
with respect to individuals who are subject to the reporting and other provisions of Section 16 of the Exchange Act
or any successor provision. The Committee, in its discretion, may delegate to the Company’s Chief Executive
Officer all or part of the Committee’s authority and duties with respect to Awards to individuals who are not
subject to the reporting and other provisions of Section 16 of the Exchange Act or any successor provision. The
Committee may revoke or amend the terms of a delegation at any time, but such action shall not invalidate any
prior actions of the Committee’s delegee or delegees that were consistent with the terms of the Plan.
5.
Eligibility
Persons eligible to participate in the Plan include: (i) all employees of the Company and its Subsidiaries
(including any entity that becomes a Subsidiary after the Effective Date) who, in the opinion of the Committee in
its sole discretion, are Key Employees; (ii) all Non-Employee Directors; and (iii) all individuals providing bona fide
consulting or advisory services to the Company or its Subsidiaries (including any entity that becomes a Subsidiary
after the Effective Date) who, in the opinion of the Committee in its sole discretion, are Consultants. The grant of an
Award shall not obligate the Company to pay a Key Employee, Non-Employee Director, or Consultant any particular
amount of remuneration, to continue the employment of a Key Employee or the service of a Non-Employee
Director or Consultant after the grant, or to make further grants to a Key Employee, Non-Employee Director or
Consultant at any time thereafter.
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6.
Awards
Subject to the terms and provisions of the Plan, at any time and from time to time, the Committee shall
make, and determine the forms, amounts, terms, conditions and limitations of, Awards under the Plan to such Key
Employees, Non-Employee Directors, and Consultants as may be selected by the Committee. The terms, conditions
and limitations of each Award under the Plan shall be set forth in an Award Agreement, in a form approved by the
Committee, consistent, however, with the terms and provisions of the Plan. The forms, amounts, terms, conditions
and limitations of Awards need not be the same for all Participants. Such Awards may take the following forms in
the Committee’s sole discretion:
(a)
Stock Options. These are options to purchase Common Stock (“Stock Options”). All Stock Options
granted under the Plan are intended to be Nonqualified Stock Options, unless the applicable Award Agreement
expressly states that the Stock Option is intended to be an ISO and the ISO meets the requirements set forth in
Section (a)(ii) below.
(i)
Stock Options Generally. At the time of Award the Committee shall determine, and shall
include in the Award Agreement, the exercise period, the exercise price, vesting requirements, expiration date, and
such other terms, conditions or restrictions on the grant or exercise of the Stock Option as the Committee deems
appropriate. Notwithstanding the foregoing, the exercise price per Share of a Stock Option shall in no event be less
than the Fair Market Value on the date the Stock Option is granted (subject to later adjustment pursuant to
Sections 8 and 9 hereof). In addition to other restrictions contained in the Plan, each Stock Option shall expire at
such time as the Committee shall determine at the time of grant, provided, however, that no Stock Option shall be
exercisable later than the tenth anniversary of the date it is granted. A Stock Option may be exercised from time to
time upon actual receipt by the Company of written notice of exercise in the form (which may be electronic or via a
third party) prescribed by the Committee (or its delegee) stating the number of Shares with respect to which the
Stock Option is being exercised, together with payment of the Stock Option exercise price. Payment of the Stock
Option exercise price shall be made: (i) in cash, (ii) in Shares (any such Shares valued at Fair Market Value on the
date of exercise) that the Participant has held for such period of time as may be required by the Committee to
avoid adverse accounting consequences, (iii) through the withholding of Shares (any such Shares valued at Fair
Market Value on the date of exercise) otherwise issuable upon the exercise of the Stock Option in a manner that is
compliant with applicable law, (iv) by delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to deliver to the Company, from the sale proceeds with respect to the sale of Shares, the
amount necessary to pay the exercise price of the Stock Option and, if necessary, applicable withholding taxes, or
(v) a combination of the foregoing methods, in each such case in accordance with applicable law and the terms of
the Plan, the Award Agreement and any applicable guidelines of the Committee in effect at the time.
(ii)
ISOs. The Committee may grant Stock Options under the Plan that are intended to be
ISOs, provided that ISOs may not be granted to Non-Employee Directors or Consultants. Such ISOs shall comply
with the requirements of Section 422 of the Code (or any successor provision thereto). No ISO may be granted to
any Participant who at the time of such grant, owns more than ten percent of the total combined voting power of
all classes of stock of the Company or of any Subsidiary, unless: (i) the exercise price for such ISO is at least 110%
of the Fair Market Value of a Share on the date the ISO is granted and (ii) the date on which such ISO terminates is
a date not later than the day preceding the fifth anniversary of the date on which the ISO is granted. The
Committee shall set forth in the Award Agreement when, and under what circumstances, an ISO may be exercised
after termination of the Participant’s employment. In the event an ISO is exercisable after (a) three months from the
Participant’s termination of employment for reasons other than disability (as defined under Section 22(e)(3) of the
Code) or death, or (b) one year from the Participant’s termination of employment on account of disability (as
defined under Section 22(e)(3) of the Code) or death, then the Award Agreement shall specifically provide that the
exercise beyond such periods shall be the exercise of a Nonqualified Stock Option. The Committee may, in its sole
discretion, amend a previously granted ISO to provide for more liberal exercise provisions, provided, however, that if
the ISO as amended no longer meets the requirements of Section 422 of the Code, and, as a result the Stock
Option no longer qualifies for favorable federal income tax treatment under Section 422 of the Code, the
amendment shall not become effective without the written consent of the Participant. Any Participant who makes
a “disposition” (within the meaning of Section 424(c) of the Code or any successor provision) of Shares acquired
upon the exercise of an ISO either (i) within two years after the date of grant of such ISO or (ii) within one year
after the transfer of such Shares to the Participant, shall notify, within ten days of disposition, the Company of such
disposition and of the amount realized upon such disposition in order that any income realized as a result of such
disposition can be properly reported by the Company on IRS Forms W-2 or 1099. An ISO, by its terms, shall be
exercisable in any calendar year only to the extent that the aggregate Fair Market Value (determined on the date
the ISO is granted) of the Shares with respect to which ISOs are exercisable by the Participant for the first time
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during the calendar year does not exceed $100,000 (the “Limitation Amount”). ISOs granted under the Plan and all
other plans of the Company and any Subsidiary shall be aggregated for purposes of determining whether the
Limitation Amount has been exceeded. The Committee may impose such conditions as it deems appropriate on an
ISO to ensure that the foregoing requirement is met. If ISOs that first become exercisable in a calendar year exceed
the Limitation Amount, the excess Options will be treated as Nonqualified Stock Options to the extent permitted
by law. If a Stock Option is intended to be an ISO, and if for any reason such Stock Option (or portion thereof) shall
not qualify as an ISO, then, to the extent of such nonqualification, such Stock Option (or portion thereof) shall be
regarded as a Nonqualified Stock Option granted under the Plan; provided that such Stock Option (or portion
thereof) otherwise complies with the Plan’s requirements relating to Nonqualified Stock Options. In no event shall
any member of the Committee, the Company or any of its Subsidiaries or Affiliates (or their respective employees,
officers or directors) have any liability to any Participant (or any other Person) due to the failure of a Stock Option
to qualify for any reason as an ISO.
(b)
Stock Appreciation Rights. The Committee may grant “Stock Appreciation Rights” (as hereinafter
defined). Each Stock Appreciation Right shall be subject to such terms, conditions and restrictions as the
Committee shall determine. Notwithstanding the foregoing, (i) in no event shall the term of any Stock Appreciation
Right exceed ten years from the date the Stock Appreciation Right was granted; and (ii) the exercise price per
Share of a Stock Appreciation Right shall in no event be less than the Fair Market Value on the date the Stock
Appreciation Right is granted. Each “Stock Appreciation Right” shall be defined as a right of a Participant, subject
to the provisions of the Award Agreement and upon exercise of such Stock Appreciation Right, to receive without
any payment to the Company therefor (except for required tax withholding), an amount equal to the product of
multiplying: (i) the number of Shares with respect to which the Stock Appreciation Right is exercised by (ii) an
amount equal to the excess of (A) the Fair Market Value per Share on the date of exercise of the Stock
Appreciation Right over (B) the exercise price of the Stock Appreciation Right. A Stock Appreciation Right may be
exercised only when the Fair Market Value of a Share exceeds the exercise price of the Stock Appreciation Right.
Stock Appreciation Rights may be exercised from time to time upon actual receipt by the Company of written
notice of exercise in the form (which may be electronic) prescribed by the Committee (or its delegee) stating the
number of Shares with respect to which the Stock Appreciation Right is being exercised. The date a notice of
exercise is received by the Company shall be the exercise date. Payment of the Stock Appreciation Right shall be
made to the Participant at the time of exercise in Shares, in cash, or in a combination thereof (any such Shares
valued at the Fair Market Value on the date of exercise), all as shall be determined by the Committee. No fractional
Shares will be issued in payment for Stock Appreciation Rights, but instead cash will be paid for a fraction or, if the
Committee should so determine, the number of Shares will be rounded downward to the next whole Share.
(c)
Other Stock-Based Awards.
(i)
Generally. The Committee may grant or sell Awards of Shares, Awards of restricted Shares
and Awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value or
number of, or are in any way payable in the form of, Shares (including, without limitation, restricted stock units and
performance stock units). Such “Other Stock-Based Awards” shall be in such form and amounts, and dependent on
such conditions, as the Committee may determine, including, without limitation, the right to receive, or vest with
respect to, one or more Shares (or the equivalent cash value of such Shares) upon the completion of a specified
period of service, the occurrence of an event and/or the attainment of performance objectives. Other Stock-Based
Awards may be granted alone or in addition to any other Awards under the Plan. Subject to the provisions of the
Plan, the Committee shall determine to whom and when Other Stock-Based Awards will be made; the number of
Shares to be awarded under (or otherwise related to) such Other Stock-Based Awards; whether such Other Stock-
Based Awards shall be settled in cash, Shares or a combination of cash and Shares; any applicable Period of
Restriction; any applicable Performance Goal(s) and Performance Period(s); and all other terms and conditions of
such Awards (including, without limitation, the vesting provisions thereof and provisions ensuring that all Shares so
awarded and issued shall be fully paid and non-assessable). At the sole discretion of the Company, custody of
restricted Shares may be retained by the Company until the termination of the applicable Period of Restriction. The
Committee shall impose such other restrictions on any Other Stock-Based Awards granted pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under applicable federal or state securities laws,
and may legend any certificates representing restricted Shares to give appropriate notice of such restrictions or
otherwise denote the restricted Shares as restricted, if issued in book-entry or electronic form.
(ii)
Performance-Based Awards. Notwithstanding anything to the contrary herein, the
Committee may award Other Stock-Based Awards that are intended to constitute Performance-Based Awards. A
Participant’s Performance-Based Award shall be determined based on the attainment of one or more written
Performance Goals for one or more Performance Periods, in each case as determined by the Committee in its sole
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2021 Proxy Statement
discretion. The Committee shall determine whether, with respect to a Performance Period, the applicable
Performance Goals have been met with respect to a given Participant and, if they have, shall so certify and shall
certify the amount of the applicable Performance-Based Award to be paid. No Performance-Based Awards will be
paid for such Performance Period until such certification is made by the Committee. The amount of the
Performance-Based Award actually paid to a given Participant may be more or less than the amount determined
by the applicable Performance Goal formula, at the discretion of the Committee, if allowed by the Award
Agreement. The amount of the Performance-Based Award determined by the Committee for a Performance Period
shall be paid to the Participant at such time as determined by the Committee in its sole discretion after the end of
such Performance Period.
(d)
Treatment of Dividends and Dividend Equivalents on Unvested Awards.
(i)
Stock Options and Stock Appreciation Rights. In no event shall any Stock Option or Stock
Appreciation Right granted under the Plan include any right to dividend equivalents with respect to such Stock
Option or Stock Appreciation Right or to the underlying Shares.
(ii)
Other Stock-Based Awards. In no event shall dividends or dividend equivalents be paid
with respect to Performance-Based Awards unless and until the applicable Performance Goal(s) have been met
(subject to any delay in payment required by Section 409A of the Code, if applicable). During the Period of
Restriction, unless otherwise provided in the Award Agreement, dividends and other distributions on restricted
Shares that are not subject to one or more Performance Goals shall be accumulated but not paid to the Participant
unless and until the Period of Restriction has ended and applicable vesting requirements have been satisfied. With
respect to restricted Shares subject to one or more Performance Goals, during the Period of Restriction, dividends
on such restricted Shares may be accumulated but not paid to the Participant unless and until the applicable
Performance Goal(s) have been met (subject to any delay in payment required by Section 409A of the Code, if
applicable). If any such dividends or distributions on restricted Shares are paid in Shares, such Shares shall be
subject to the same restrictions on transferability as the underlying restricted Shares with respect to which they are
paid. With respect to Other Stock-Based Awards (including, without limitation, restricted stock units and
performance stock units) other than restricted Shares, the Committee may provide in the Award Agreement for
payment of dividend equivalents, provided that any such dividend equivalents may be accumulated but not paid to
the Participant unless and until the Period of Restriction applicable to the Other Stock-Based Award has ended and
any applicable Performance Goal(s) have been met (subject to any delay in payment required by Section 409A of
the Code, if applicable).
7.
Limitations and Conditions
(a)
Term of the Plan. No Award may be granted under the Plan after May 25, 2031, but Awards
outstanding on such date shall remain valid in accordance with their terms.
(b)
Effect of the Plan on Employment or Service Relationship. Nothing contained herein shall affect
the right of the Company or any Subsidiary to terminate any Participant’s employment or other service relationship
at any time or for any reason nor give any Key Employee, Non-Employee Director, or Consultant any right to be
engaged by or retained in the service of the Company or any of its Subsidiaries. The establishment of the Plan shall
not confer upon any Key Employee, Non-Employee Director, or Consultant any legal or equitable right against the
Company, a Subsidiary, or the Committee, except as expressly provided in the Plan. The Plan does not constitute an
inducement or consideration for the employment or service of any Key Employee, Non-Employee Director, or
Consultant, nor is it a contract between the Company or any of its Subsidiaries and any Key Employee,
Non-Employee Director, or Consultant.
(c)
Award Transfer and Election Restrictions. Unless otherwise permitted by the Committee at or after
the time of grant of any Award, no benefit or Award (or right to receive payment in connection therewith) under
the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
hypothecation, or charge, otherwise than upon the death of a Participant by will or the laws of descent and
distribution and, for restricted Shares, until termination of the applicable Period of Restriction or upon earlier
satisfaction of other conditions as specified by the Committee in its sole discretion and set forth in the Award
Agreement, and any attempt to do so shall be void. No transfer of an Award or of any right or interest in an Award
may be made for consideration. No such benefit shall, prior to receipt thereof by the Participant, be in any manner
liable for or subject to the debts, contracts, liabilities, engagements, or torts of the Participant. No election as to
benefits, exercise of any Award or exercise of rights with respect to any Award may be made during a Participant’s
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lifetime by anyone other than the Participant except by a legal representative or guardian appointed for or by the
Participant or, after a Participant’s death, by the legatees, personal representatives or distributees of the
Participant.
(d)
Shareholder Rights.
(i)
Stock Options and Stock Appreciation Rights. A Participant holding Stock Options or
Stock Appreciation Rights shall have no right to vote the underlying Shares, no right to receive dividends on the
underlying Shares, and no other rights or privileges of shareholders of the Company in respect of the underlying
Shares unless and until certificates representing any such Shares have been issued by the Company to such
Participants (or book entry representing such Shares has been made and such Shares have been deposited with
the appropriate registered book-entry custodian).
(ii)
Other Stock-Based Awards. Unless otherwise provided in the Award Agreement,
Participants holding restricted Shares may exercise full voting rights with respect to those Shares throughout the
applicable Period of Restriction or upon earlier satisfaction of other conditions as specified by the Committee in its
sole discretion and set forth in the Award Agreement. During the Period of Restriction, unless otherwise provided
in the Award Agreement, Participants holding restricted Shares shall have all rights and privileges of shareholders
of the Company, provided, however, that such restricted Shares shall be subject to the applicable risk of forfeiture,
limitations on transfer and vesting requirements set forth in the Award Agreement and shall be subject to any
limitation on dividends set forth in the Award Agreement or Section 6(d)(ii) hereof. With respect to Other Stock-
Based Awards (including, without limitation, restricted stock units and performance stock units) other than
restricted Shares, unless otherwise provided in the Award Agreement, a Participant holding such Other Stock-
Based Award shall have no right to vote the underlying Shares, no right to receive dividends on the underlying
Shares (provided, however, that such Other Stock-Based Award may provide for payment of such dividend
equivalents as set forth in the Award Agreement and subject to the limitations of Section 6(d)(ii) hereof), and no
other rights or privileges of shareholders of the Company in respect of the underlying Shares unless and until
certificates representing any such Shares have been issued by the Company to such Participants (or book entry
representing such Shares has been made and such Shares have been deposited with the appropriate registered
book-entry custodian).
(e)
Effect of Awards on Computing Benefits or Contributions; ERISA. Absent express provisions to the
contrary, any Award under the Plan shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement or severance plan of the Company or any Subsidiary and shall not affect any
benefits under any other benefit plan of any kind now or subsequently in effect under which the availability or
amount of benefits is related to level of compensation. The Plan is not a “retirement plan” or “welfare plan” under
the Employee Retirement Income Security Act of 1974, as amended.
(f)
Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for incentive
and deferred compensation. With respect to any payments as to which a Participant has a fixed and vested interest
but which are not yet made to a Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general unsecured creditor of the Company.
(g)
Successors and Assigns. The Plan and all obligations of the Company under the Plan with respect
to Awards granted hereunder shall be binding on all successors and assigns of the Company and a Participant,
including without limitation, the estate of such Participant and the executor, administrator or trustee of such estate,
or any receiver or trustee in bankruptcy or representative of the Participant’s creditors.
(h)
Repricing Prohibited. Notwithstanding any provision herein to the contrary, other than as
permitted under Section 8 or 9 below, the repricing of any Stock Option or Stock Appreciation Right, once granted
hereunder, is prohibited without prior approval of the Company’s shareholders. For this purpose, a “repricing”
means any of the following (or any other action that has the same effect as any of the following): (i) changing the
terms of any Stock Option or Stock Appreciation Right to lower the exercise price thereof; (ii) any other action that
is treated as a “repricing” under the rules and regulations of the primary securities market on which the Common
Stock is traded; and (iii) repurchasing for cash or canceling any Stock Option or Stock Appreciation Right in
exchange for another Award at a time when the exercise price per Share is greater than the Fair Market Value of
the underlying Shares, unless the cancellation and exchange occurs in connection with an event described in
Section 8 or 9 below.
Legends. In addition to any other legends placed on certificates, or to which restricted Shares
issued in book-entry or electronic form are made subject, pursuant to Section 6(c)(i), any Award of restricted
(i)
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2021 Proxy Statement
Shares issued in book-entry or electronic form shall be subject to the following legend, and any certificates
representing restricted Shares granted pursuant to the Plan shall bear a legend in substantially the following form:
The sale or other transfer of the shares of stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain restrictions on transfer set forth in the
Dollar General Corporation 2021 Stock Incentive Plan and in an agreement dated <>. A copy of the Plan and such agreement may be obtained by contacting the <> of
Dollar General Corporation.
Once the Shares are released from the restrictions, the Participant shall be entitled to have such legend
removed from the Share certificate or similar notation removed from such Shares if issued in book-entry or
electronic form.
8.
Adjustments upon Certain Events
In the event of any Share dividend, Share split, spin-off, Share combination, reclassification, recapitalization,
liquidation, dissolution, reorganization, merger in which the Company is the surviving corporation, Change in
Control, payment of a dividend (other than a cash dividend paid as part of a regular dividend program), exchange
of Shares or other corporate exchange, any change in the Company’s capital stock (including, but not limited to,
the creation or issuance to shareholders generally of rights, options, or warrants for the purchase of common stock
or preferred stock of the Company), any equity restructuring (as defined under FASB Accounting Standards
Codification Topic 718 or any successor provision thereto), or other similar transaction or occurrence which affects
the equity securities of the Company or the value thereof, the Committee shall: (i) adjust the aggregate number
and kind of Shares or securities of the Company to be issued under the Plan (under outstanding Awards and
Awards to be granted in the future); (ii) adjust the exercise prices related to outstanding Awards; (iii) adjust
applicable annual limits on Awards which thereafter may be made; and/or (iv) take such other action (including,
without limitation providing for payment of a cash amount to holders of outstanding Awards), in each case as it
deems reasonably necessary to address, on an equitable basis, the effect of the applicable corporate event on the
Plan and any outstanding Awards. Where an Award being adjusted is an ISO or is subject to or falls under an
exemption from Section 409A of the Code, the adjustment of any Stock Option and/or Stock Appreciation Right
shall also be effected so as to comply with Section 424(a) of the Code and not to constitute a modification within
the meaning of Section 424(h) or 409A, as applicable, of the Code. Any such adjustment made or action taken by
the Committee in accordance with this Section 8 shall be final and binding for all purposes on all parties concerned
(including, but not limited to, Participants and their beneficiaries or successors) and shall not require the consent of
any Participant. If the adjustment would produce fractional Shares with respect to any Award, the Committee may
adjust appropriately the number of Shares covered by the Award so as to eliminate the fractional Shares.
Adjustments made by the Committee pursuant to this Section 8 to outstanding Awards shall be made as
appropriate to maintain favorable tax and/or accounting treatment.
9.
Change in Control
Notwithstanding Section 8 above, in the event of a Change in Control, the Committee, as constituted
before such Change in Control, in its sole discretion and without the consent of the Participant, may, as to any
outstanding Award, either at the time the Award is made or any time thereafter, take any one or more of the
following actions: (i) provide for acceleration of the vesting, delivery and exercisability of, and the lapse of
time-based and/or performance-based vesting restrictions with respect to, any such Award so that such Award
may be exercised or realized in full on or before a date initially fixed by the Committee; (ii) provide for the
purchase, settlement or cancellation of any such Award by the Company, for an amount of cash equal to the
amount which could have been obtained upon the exercise of such Award or realization of such Participant’s rights
had such Award been currently exercisable or payable; (iii) provide for the replacement of any such Share-settled
Award with a cash-settled Award; (iv) make such adjustment to any such Award then outstanding as the
Committee deems appropriate to reflect such Change in Control and to retain the economic value of the Award; (v)
provide that for a period of at least ten business days prior to the Change in Control, any Stock Options or Stock
Appreciation Rights shall be exercisable, to the extent applicable, as to all Shares subject thereto and that upon the
occurrence of the Change in Control, such Awards shall terminate and be of no further force and effect; or
(vi) cause any such Award then outstanding to be assumed, or new rights substituted therefor, by the acquiring or
surviving corporation in such Change in Control. For the avoidance of doubt, the Committee may apply any of the
foregoing to any given outstanding Award or group or type of Awards, and shall not be required to apply any of
the foregoing uniformly to all outstanding Awards. Where an Award is subject to or falls under an exemption from
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Section 409A of the Code, this Section 9 will be applied in a manner so as to comply with Section 409A of the
Code or to maintain the exemption from Section 409A of the Code, as applicable.
10.
Amendment, Termination and Substitution; 409A; Clawback
(a)
Amendment and Substitution of Awards. Subject to the terms and provisions and within the
limitations of the Plan, the Committee shall have the authority to make such amendments or modifications to any
terms and conditions applicable to any outstanding Award or accelerate the vesting thereof, provided that no such
action shall modify any Award in a manner that adversely impacts, other than in a de minimis manner, a Participant
with respect to any outstanding Awards, other than pursuant to Sections 8, 9, 10(c) or 11 hereof, without the
Participant’s consent, except as such modification is provided for or contemplated in the terms of the Award or the
Plan (including Section 4(a) above). In addition, the Committee may cancel or accept the surrender of outstanding
Awards (to the extent not yet exercised) granted under the Plan or outstanding awards granted under any other
equity compensation plan of the Company and authorize the granting of new Awards pursuant to the Plan in
substitution therefor so long as the new or substituted awards do not specify a lower exercise price than the
cancelled or surrendered Awards or awards, and otherwise the new Awards may be of a different type than the
cancelled or surrendered Awards or awards, may specify a longer term than the cancelled or surrendered Awards
or awards, may provide for more rapid vesting and exercisability than the cancelled or surrendered Awards or
awards, and may contain any other provisions that are authorized by the Plan. The Committee shall continue to
have the authority to amend or modify the terms of any outstanding Award after May 25, 2031, provided that no
amendment or modification will extend the original term of the Award beyond that set forth in the applicable
Award Agreement. Notwithstanding any provision of the Plan to the contrary, the Committee shall not amend,
modify, or substitute an Award in a manner that violates Section 409A of the Code, or causes an Award that
previously qualified for an exemption from Section 409A of the Code to become subject to Section 409A of the
Code, and the Committee shall not amend, modify, or substitute an Award that satisfies the requirements of
Rule 16b-3 in a manner that causes any exemption pursuant to Rule 16b-3 to become no longer available.
(b)
Amendment and Termination of the Plan. The Board may amend, modify, suspend or terminate the
Plan without shareholder approval or any Participant’s consent, except that: (i) shareholder approval shall be
required (1) for any amendment or modification, other than an action under Sections 4(d), 8, 9, 10(c) or 11 hereof,
which would increase the aggregate number of Shares available for Awards under the Plan, decrease the exercise
price of outstanding Stock Options or Stock Appreciation Rights or extend the term of the Plan, or (2) to the
extent that shareholder approval is required by the Code, pursuant to the rules and regulations under Section 16 of
the Exchange Act, by any national securities exchange or system on which the Common Stock is then listed or
reported, by any regulatory body having jurisdiction with respect thereto or under any other applicable laws, rules
or regulations; and (ii) Participant consent shall be required for any such Board action which shall adversely impact,
other than in a de minimis manner, a Participant with respect to any outstanding Awards, other than pursuant to
Sections 4(d), 8, 9, 10(c) or 11 hereof, or as otherwise contemplated in the terms of the Award.
(c)
Code Section 409A. The Awards under the Plan are intended to comply with or be exempt from
Section 409A of the Code and the terms of the Awards and the Plan will be interpreted in a manner intended to
comply with or be exempt from Section 409A of the Code, as applicable. Notwithstanding anything herein to the
contrary, (i) if, at the time of the Participant’s termination of service with the Company or a Subsidiary, the
Participant is a “specified employee” as defined in Section 409A of the Code, and the deferral of the
commencement of any payments or benefits otherwise payable hereunder as a result of such termination of
service is necessary in order to prevent the imposition of any accelerated or additional tax under Section 409A of
the Code, then the Company will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Participant and
without the payment of any interest unless the Award Agreement specifically provides otherwise) until the date
that is six months and one day following the Participant’s termination of service (or the earliest date as is permitted
under Section 409A of the Code), if such payment or benefit is payable upon a termination of service and (ii) if any
other payments of money or other benefits due to the Participant hereunder would cause the application of an
accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred, if
deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such
payment or other benefits shall be restructured, to the extent possible, in a manner, reasonably determined by the
Board in consultation with the Participant, that does not cause such an accelerated or additional tax or result in an
additional cost to the Company (without any reduction in such payments or benefits ultimately paid or provided to
the Participant and without the payment of any interest unless the Award Agreement specifically provides
otherwise). Each payment made under the Plan shall be designated as a “separate payment” within the meaning of
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2021 Proxy Statement
Section 409A of the Code and, unless specifically provided otherwise in an Award Agreement, all references to
“termination of employment” or “termination of service” shall be deemed to refer to a “separation from service”
within the meaning of Section 409A of the Code and the default provisions thereunder. Notwithstanding any other
provision of the Plan or an Award Agreement, the Company shall not be liable to a Participant in the event any
payment or benefit under the Plan fails to be exempt from or comply with Section 409A of the Code.
(d)
Clawback. The Committee shall specify in, or in respect of, any Award granted hereunder, that as a
condition of receiving payment of such Award, the Participant’s rights, payments, and benefits with respect to such
Award shall be subject to any reduction, cancellation, forfeiture or recoupment, in whole or in part, upon the
occurrence of certain specified events, as may be required by the Securities and Exchange Commission or any
applicable national exchange, law, rule or regulation or as set forth in a separate “clawback” or recoupment policy
as may be adopted from time to time by the Board or the Committee.
11.
Governing Law; International Participants
(a)
The Plan, and all Award Agreements hereunder, shall be governed by and construed in accordance
with the laws of the State of Delaware applicable therein. The Plan and Awards are subject to all present and future
applicable provisions of the Code. If any provision of the Plan or an Award conflicts with any such Code provision,
the Committee shall cause the Plan to be amended, and shall modify the Award, so as to comply, or if for any
reason amendments cannot be made, that provision of the Plan or Award shall be void and of no effect.
(b)
With respect to Participants who reside or work outside the United States of America, the
Committee may, in its sole discretion, amend the terms of the Plan or Awards with respect to such Participants in
order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment
for a Participant, the Company or any Subsidiary.
12.
Transfers and Leaves of Absence
For purposes of the Plan, unless the Committee determines otherwise: (a) a transfer of a Participant’s
employment without an intervening period of separation among the Company and any Subsidiary shall not be
deemed a termination of employment, and (b) a Participant who is granted in writing a leave of absence or who is
entitled to a statutory leave of absence shall be deemed to have remained in the service of the Company (and any
Subsidiary) during such leave of absence (subject to the requirements of Section 409A of the Code).
13.
Withholding Taxes
In compliance with Section 409A of the Code, the Company shall have the right to deduct or withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy any federal, state or local income or
other taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any grant,
exercise, or payment made under or as a result of the Plan. It shall be a condition to the obligation of the Company
to deliver Shares upon the exercise of a Nonqualified Stock Option or upon the occurrence of any other taxable
event with respect to any Award that the Participant pays to the Company or makes arrangements satisfactory to
the Company for payment of the applicable withholding taxes. As an alternative to making a cash payment to the
Company to satisfy applicable withholding tax obligations, a Participant may elect or the Committee may require a
Participant to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares
having a Fair Market Value equal to the amount required to be withheld, or by delivering to the Company Shares
having a Fair Market Value equal to the amount required to be withheld. The value of any Shares so withheld or
delivered shall be based on Fair Market Value of the Shares on the date that the amount of tax to be withheld is to
be determined. Subject to any limitation under Section 409A of the Code, the Committee may provide in an Award
Agreement that a Participant is permitted to elect withholding in an amount in excess of the minimum statutory tax
rates (up to the maximum statutory tax rates). All elections by the Participant shall be irrevocable and be made in
writing and in such manner as determined by the Committee (or its delegee) in advance of the day that the
withholding requirements apply and, to the extent applicable, in accordance with the requirements of Section 409A
of the Code.
14.
Securities Law Restrictions
The Committee may require each Participant purchasing or acquiring Shares pursuant to a Stock Option or
other Award to represent to and agree with the Company in writing that such Participant is acquiring the Shares
for investment and not with a view to the distribution thereof. All Shares delivered under the Plan shall be subject
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to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission, any national securities exchange
or system on which the Common Stock is then listed or reported, and any applicable federal or state securities
laws, and the Committee (or its delegee) may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions or otherwise denote the Shares as being subject to such restrictions, if
issued in book-entry or electronic form. No Shares shall be issued hereunder unless the Company shall have
determined that such issuance is in compliance with, or pursuant to an exemption from, all applicable federal and
state securities laws.
15.
Severability
In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
16.
Share Certificates and Book Entry
To the extent that the Plan provides for issuance of certificates to represent shares of Common Stock, the
issuance may be effected on a non-certificated basis to the extent permitted by applicable law and the applicable
rules of any national securities exchange or system on which the Common Stock is then listed or reported.
Notwithstanding any provision of the Plan to the contrary, in its discretion the Company may satisfy any obligation
to deliver Shares represented by stock certificates by delivering Shares in book-entry or electronic form. If the
Company issues any Shares in book-entry or electronic form that are subject to terms, conditions and restrictions
on transfer, a notation shall be made in the records of the transfer agent with respect to any such Shares describing
all applicable terms, conditions and restrictions on transfer. In the case of restricted Shares granted under the Plan,
such notation shall be substantially in the form of the legend contained in Section 7(i).
17.
Electronic Transmissions and Records
Subject to limitations under applicable law, the Committee (and its delegee) is authorized in its discretion
to issue Awards and/or to deliver and accept notices, elections, consents, designations and/or other forms or
communications to or from Participants by electronic or similar means, including, without limitation, transmissions
through email or specialized software, recorded messages on electronic telephone systems, and other permissible
methods, on such basis and for such purposes as it determines from time to time, and all such communications will
be deemed to be “written” for purposes of the Plan.
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2021 Proxy Statement
Appendix B
Amendment to the Amended and Restated Charter of
Dollar General Corporation (the “Charter”) to
Permit a Special Meeting Request Right
If the shareholders approve Proposal 5, the Company currently intends to file with the Tennessee Secretary
of State a certificate of amendment, which would amend Article 14 of the Charter in its entirety to read as follows
(with additions shown in underlined text and deletions shown in text that has been struck through):
“14. Special meetings of shareholders may be called at any time, but only (i) by the
Chairman of the Board of Directors, by the Chief Executive Officer of the corporation, or upon a
resolution by or affirmative vote of the Board of Directors, or (ii) subject to the applicable
provisions of the Bylaws of the corporation, upon a resolution by or affirmative vote of the Board
of Directors upon written request received by the secretary of the corporation from holders of
record or beneficial owners (a) representing at least twenty-five percent (25%) of the voting power
of the shares entitled to vote on the matter or matters to be brought before the proposed special
meeting and (b) that have complied in full with the requirements set forth in the corporation’s
Bylaws, as amended from time to timeand not by the shareholders.
Notwithstanding any other provision of this Charter, the affirmative vote of holders of a
majority of the voting power of the shares entitled to vote at an election of directors, voting
together as a single class, shall be required to amend or repeal this Article 14 of this Charter, or to
amend, alter, change or repeal, or to adopt any provisions of this Charter or of the corporation’s
Bylaws in a manner that is inconsistent with the purpose and intent of this Article 14.”
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Appendix C
Amendments to the Amended and Restated Bylaws of
Dollar General Corporation (the “Bylaws”) to
Implement Procedures Relating to a
Special Meeting Request Right
If the shareholders approve Proposal 5, the Board of Directors currently intends to approve the following
amendments to Section 2 and Section 9 of Article I of the Bylaws to set forth the terms and conditions of the
Special Meeting Request Right (with additions shown in underlined text and deletions shown in text that has been
struck through):
Section 2. Annual and Special Meetings.
(a) Annual Meetings. Annual meetings of shareholders shall be held, onat a date and at a, time and place,
if any, fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to
transact such other business as may properly come before the meeting.
(b) Special Meetings. Special meetings of the shareholders may be called at any time, but only (i) by the
Chairman of the Board of Directors, by the Chief Executive Officer of the Corporation, for any purpose and shall be
called by the Chief Executive Officer or Secretary if directed by the Board of Directors. A special meeting of
shareholders may be called at any time, but only by the Chairman of the Board of Directors, the Chief Executive
Officer of the corporation, or upon a resolution by or affirmative vote of the Board of Directors, and not by the
shareholders.or (ii) subject to the provisions of this Article I, Section 2(b) and any other applicable provisions of
these Bylaws, upon a resolution by or affirmative vote of the Board of Directors upon the written request (a
“Shareholder Special Meeting Request”) received by the Secretary of the Corporation from Record Holders (as
defined in Article I, Section 9) or Nominee Holders (as defined in Article I, Section 9) (each, a “Requesting
Shareholder” and collectively, the “Requesting Shareholders”) (A) representing in the aggregate at least twenty-
five percent (the “Requisite Percentage”) of the voting power of the Corporation’s shares entitled to vote on the
matter or matters to be brought before the proposed special meeting (a “Shareholder Requested Special
Meeting”); provided that such shares have been “owned” continuously by such Requesting Shareholders for at least
one year prior to the date of the Shareholder Special Meeting Request (the “One-Year Period”), and (B) that have
complied in full with the requirements set forth in these Bylaws. For the purposes of this Article 1, Section 2(b),
whether shares are “owned” shall be determined in the same manner as provided in Article I, Section 12(h), and the
terms “owned,” “owning” and other variations of the word “own” shall have the same definition ascribed to such
terms in Article I, Section 12(h), provided that the terms “Noticing Shareholder” and “Eligible Shareholder” shall be
substituted with the term “Requesting Shareholder” for the purposes of such definition. Except as set forth in this
Article I, Section 2(b) or as otherwise required by law, special meetings of the shareholders of the Corporation may
not be called by any other person or persons.
(i)
In order for a Shareholder Requested Special Meeting to be called, the Shareholder Special
Meeting Request must be signed and dated by the Requesting Shareholders (or their duly authorized
agents) who are entitled to cast not less than the Requisite Percentage of votes on the matter or matters
proposed to be brought before the Shareholder Requested Special Meeting and must be delivered by
registered mail to the Secretary of the Corporation at the principal executive offices of the Corporation.
Any Shareholder Special Meeting Request shall set forth with particularity (A) the names and addresses of
the Requesting Shareholder(s), as they appear on the books of the Corporation, and if any Requesting
Shareholder holds for the benefit of another, the name and address of such beneficial owner and of any
Shareholder Associated Person (as defined in Article I, Section 10(d)), (B) the class or series and number
of shares of the Corporation’s capital stock owned of record and beneficially by each Requesting
Shareholder and Shareholder Associated Person identified in clause (A) of this Article I, Section 2(b)(i) and
documentary evidence that the Requesting Shareholders have owned the Requisite Percentage of shares
continuously for the One-Year Period, from a person and in a form acceptable for purposes of a
shareholder proposal under Rule 14a-8(b)(2) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or any successor or replacement rule, (C) an agreement by each Requesting Shareholder
to promptly notify the Corporation upon any decrease in the number of shares owned by such Requesting
2021 Proxy Statement
C-1
Shareholder occurring between the date on which the Shareholder Special Meeting Request is received by
the Secretary of the Corporation and the date of the Shareholder Requested Shareholder Meeting and an
acknowledgement by each Requesting Shareholder that the Shareholder Special Meeting Request shall be
deemed to be revoked (and any meeting scheduled in response may be canceled) if the shares owned by
the Requesting Shareholders do not represent ownership of at least the Requisite Percentage at all times
between the date on which the Shareholder Special Meeting Request is received by the Secretary of the
Corporation and the date of the Shareholder Requested Special Meeting, (D) the purpose or purposes of
the Shareholder Requested Special Meeting and the business to be acted on at the Shareholder Requested
Special Meeting, the reasons for conducting such business at the Shareholder Requested Special Meeting
and the text of the proposal or business (including the text of any resolutions proposed for consideration
and, if the business includes a proposal to amend these Bylaws, the language of the proposed
amendment), and (E) the information required by Article I, Section 10(b) as to the business proposed to be
conducted at the Shareholder Requested Special Meeting and as to the Requesting Shareholders on whose
behalf the Shareholder Special Meeting Request is being made; provided that for purposes of this Article I,
Section 2(b), (1) the terms “Noticing Shareholder” and “Holder” shall be substituted with the term
“Requesting Shareholder” and (2) the term “notice” shall be substituted with the term “Shareholder Special
Meeting Request,” in each case in all places such terms appear in Article I, Section 10(b). Other than to the
extent expressly referenced in this Article I, Section 2(b), the provisions of Article I, Section 10 shall not
apply to a Shareholder Requested Special Meeting or a Shareholder Special Meeting Request. The only
business that may be conducted at the Shareholder Requested Special Meeting properly requested by the
Requesting Shareholders shall be the business proposed in the Shareholder Meeting Special Request and
set forth in the notice of such Shareholder Requested Special Meeting; provided, however, that the Board
of Directors shall have the authority in its sole and final discretion to submit additional matters in the notice
for such Shareholder Requested Special Meeting and to cause other business to be transacted at such
Shareholder Requested Special Meeting.
(ii) After receiving a Shareholder Special Meeting Request, the Board of Directors shall determine
in good faith whether the Requesting Shareholders have satisfied the requirements set forth in these
Bylaws, which determination shall be conclusive and binding, and the Corporation shall notify the
Requesting Shareholders of the Board of Directors’ determination. If the Board of Directors determines that
the Shareholder Special Meeting Request complies with the provisions of these Bylaws and that the
proposal to be considered or business to be conducted is a proper subject for shareholder action under
applicable law, the Charter or these Bylaws, the Board of Directors shall call and send notice of a
Shareholder Requested Special Meeting for the purpose(s) set forth in the Shareholder Special Meeting
Request (as well as any additional purpose(s) deemed advisable in the sole and final discretion of the
Board of Directors) in accordance with Article I, Section 3 of these Bylaws. The Board of Directors shall
determine the place, if any, date and time for such Shareholder Requested Special Meeting, which date
shall be not later than 90 days after the date on which the Board of Directors determines that the
Shareholder Special Meeting Request satisfies the requirements set forth in these Bylaws. The Board of
Directors shall also set a record date for the determination of shareholders entitled to vote at such
Shareholder Requested Special Meeting in the manner set forth in Article I, Section 4. Each Requesting
Shareholder is required to update the information required by this Article I, Section 2(b) as of a date within
ten business days after such record date and as of a date within five business days before the date of such
Shareholder Requested Special Meeting. The Board of Directors may adjourn, postpone, reschedule or, if in
accordance with these Bylaws, cancel any Shareholder Requested Special Meeting previously scheduled
pursuant to this Article I, Section 2(b).
(iii)
In determining whether a Shareholder Requested Special Meeting has been requested by
Requesting Shareholders representing in the aggregate at least the Requisite Percentage, multiple
Shareholder Special Meeting Requests received by the Secretary of the Corporation will be considered
together only if (A) each Shareholder Special Meeting Request identifies substantially the same purpose or
purposes of, and substantially the same matters proposed to be acted on at, the Shareholder Requested
Special Meeting (in each case as determined in the sole and final discretion of the Board of Directors)
(which, if such purpose is the removal of directors, will mean that the exact same person or persons are
proposed for removal in each relevant request), and (B) such Shareholder Special Meeting Requests have
been dated and received by the Secretary of the Corporation within 30 days of the earliest dated
Shareholder Special Meeting Request that was submitted in accordance with the requirements of this
Article I, Section 2(b).
C-2
2021 Proxy Statement
(iv) Notwithstanding the foregoing provisions of this Article I, Section 2(b), the Board of Directors
shall not be required to call a Shareholder Requested Special Meeting if (A) the Shareholder Special
Meeting Request does not strictly comply with each applicable requirement of these Bylaws, (B) the
business specified in the Shareholder Special Meeting Request is not a proper subject for shareholder
action under applicable law, the Charter or these Bylaws, (C) the Board of Directors has called or calls for
an annual or special meeting of shareholders to be held within 90 days after the Secretary receives the
Shareholder Special Meeting Request and the Board of Directors determines that the business of such
meeting includes (among any other matters properly brought before the annual or special meeting) an
identical or substantially similar item of business as the business specified in the Shareholder Special
Meeting Request (“Similar Business”), (D) the Shareholder Special Meeting Request is received by the
Secretary during the period commencing 90 days prior to the anniversary date of the prior year’s annual
meeting of shareholders and ending on the date of the final adjournment of the next annual meeting of
shareholders, (E) Similar Business was presented at any meeting of shareholders held within 120 days prior
to receipt by the Secretary of the Shareholder Special Meeting Request, (F) two or more Shareholder
Requested Special Meetings have been held within the twelve month period prior to the date the
Shareholder Special Meeting Request is received by the Secretary, (G) the Shareholder Special Meeting
Request was made in a manner that involved a violation of Regulation 14A under the Exchange Act or
other applicable law, or (H) any information submitted pursuant to this Article I, Section 2(b) by any
Requesting Shareholder is inaccurate in any material respect. For purposes of this Article I, Section 2(b),
the removal of directors shall be “Similar Business” with respect to all items of business involving the
nomination, election or removal of directors, the changing of the size of the Board of Directors and the
filling of vacancies and/or newly created directorships. In addition, if none of the Requesting Shareholders
who submitted a Shareholder Special Meeting Request appears or sends a qualified representative to
present the matters for consideration that were specified in the Shareholder Special Meeting Request, the
Corporation need not present such matters for a vote at such Shareholder Requested Special Meeting
regardless of whether proxies have been solicited with respect to such matters.
(v) Any shareholder who submitted a Shareholder Special Meeting Request may revoke its
written request by written revocation received by the Secretary at the principal executive offices of the
Corporation at any time prior to the Shareholder Requested Special Meeting. A Shareholder Special
Meeting Request shall be deemed revoked (and any meeting scheduled in response may be canceled) if
the Requesting Shareholders do not continue to own at least the Requisite Percentage at all times between
the date the Shareholder Special Meeting Request is received by the Secretary and the date of the
applicable Shareholder Requested Special Meeting, and each Requesting Shareholder shall promptly notify
the Secretary of any decrease in ownership of the number of shares owned by such Requesting
Shareholder. If, as a result of any revocations, there are no longer valid unrevoked written Shareholder
Special Meeting Requests from Requesting Shareholders holding the Requisite Percentage, there shall be
no requirement to call or hold the Shareholder Requested Special Meeting.
(vi) The Board of Directors (and any other person or body authorized by the Board of Directors)
shall have the power and authority to interpret this Article I, Section 2(b) and to make any and all
determinations necessary or advisable to apply this Article I, Section 2(b) to any persons, facts or
circumstances, including but not limited to, whether outstanding shares of the Corporation’s capital stock
are “owned” for purposes of meeting the Requisite Percentage of this Article I, Section 2(b), whether a
Shareholder Special Meeting Request complies with the requirements of this Article I, Section 2(b) and
whether any and all requirements of this Article I, Section 2(b) have been satisfied. The Board of Directors
(and any other person or body authorized by the Board of Directors) may require a Requesting
Shareholder to furnish any additional information as may be reasonably required by the Board of Directors
(as determined solely and exclusively by the Board of Directors, with such determination being final and
binding) to permit the Board of Directors (and any other person or body authorized by the Board of
Directors) to make any such interpretation or determination, and each Requesting Shareholder shall
provide such information to the Board of Directors within ten business days of such request. Any such
interpretation or determination adopted in good faith by the Board of Directors (or any other person or
body authorized by the Board of Directors) shall be final, conclusive and binding on all persons, including
without limitation the Corporation and all Requesting Shareholders.
Section 9. Business at Annual and Special Meetings. No business may be transacted at an annual or
special meeting of shareholders other than business that is:
2021 Proxy Statement
C-3
(a)
specified in a notice of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors or an authorized committee thereof (including any such notice given by or at the direction of the
Board of Directors following receipt by the Secretary of a Shareholder Special Meeting Request in accordance with
Article I, Section 2(b) of these Bylaws),
(b) otherwise brought before the meeting by or at the direction of the Board of Directors or an
authorized committee thereof, or
(c) otherwise brought before the meeting by a “Noticing Sshareholder” who complies with the notice,
eligibility and other requirements set forth in Article I, Section 10 or Article I, Section 12 of these Bylaws, as
applicable (such shareholder, a “Noticing Shareholder”).
Notwithstanding any other provision of these Bylaws, in the case of a Shareholder Requested
Special Meeting, no shareholder may propose any business to be considered at the Shareholder Requested Special
Meeting, except pursuant to the Shareholder Special Meeting Request delivered pursuant to Article I, Section 2(b)
of these Bylaws. A “Noticing Shareholder” must be either a “Record Holder” or a “Nominee Holder.” A “Record
Holder” is a shareholder that holds of record stock of the Corporation entitled to vote at the meeting on the
business (including any election of a director) to be appropriately conducted at the meeting. A “Nominee Holder”
is a shareholder that holds such stock through a nominee or “street name” holder of record and can demonstrate to
the Corporation such indirect ownership of such stock and such Nominee Holder’s entitlement to vote such stock
on such business. Clause (c) of Section 9 of this Article I shall be the exclusive means for a Record Holder or a
Nominee HolderNoticing Shareholder to make director nominations or submit other business before a meeting of
shareholders (other than proposals brought under Rule 14a-8 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and included in the Corporation’s notice of meeting, which proposals are not
governed by these Bylaws, or submitted at a Shareholder Requested Special Meeting in accordance with Article I,
Section 2(b) of these Bylaws). Notwithstanding anything in these by-lawsBylaws to the contrary, no business shall
be conducted at a shareholders’ meeting except in accordance with the procedures set forth in Section 9,
Section 10 or Section 12 of this Article I of these Bylaws.
C-4
2021 Proxy Statement
10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(cid:1409)
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
(cid:1407)
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended January 29, 2021, or
For the transition period from ________ to ________
Commission file number: 001-11421
DOLLAR GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
TENNESSEE
(State or other jurisdiction of
incorporation or organization)
61-0502302
(I.R.S. Employer
Identification No.)
100 MISSION RIDGE
GOODLETTSVILLE, TN 37072
(Address of principal executive offices, zip code)
Registrant’s telephone number, including area code: (615) 855-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $0.875 per share
Trading Symbol(s)
DG
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:1409) No (cid:1407)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes (cid:1407) No (cid:1409)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes (cid:1409) No (cid:1407)
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes (cid:1409) No (cid:1407)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer (cid:1409)
Non-accelerated filer (cid:1407)
Accelerated filer (cid:1407)
Smaller reporting company (cid:1407)
Emerging growth company (cid:1407)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:1407)
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that
prepared or issued its audit report. (cid:1409)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:1407) No (cid:1409)
The aggregate market value of the registrant’s common stock outstanding and held by non-affiliates as of July 31, 2020 was
$37.7 billion calculated using the closing market price of the registrant’s common stock as reported on the NYSE on such date ($190.40). For this
purpose, directors, executive officers and greater than 10% record shareholders are considered the affiliates of the registrant.
The registrant had 239,264,252 shares of common stock outstanding as of March 12, 2021.
DOCUMENTS INCORPORATED BY REFERENCE
Certain of the information required in Part III of this Form 10-K is incorporated by reference to the registrant’s definitive proxy
statement to be filed for the Annual Meeting of Shareholders to be held on May 26, 2021.
INTRODUCTION
PART I
TABLE OF CONTENTS
PART II
ITEM 1. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
ITEM 1A. RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ITEM 1B. UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ITEM 2. PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ITEM 4. MINE SAFETY DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
INFORMATION ABOUT OUR EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 24
ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . 41
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . . . . 42
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Consolidated Statements of Shareholders' Equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ITEM 9A. CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ITEM 9B. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE . . . . . . . 71
ITEM 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ITEM 16. FORM 10-K SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
2
2020 Form 10-K
General
INTRODUCTION
This report contains references to years 2021, 2020, 2019, 2018, 2017, and 2016, which represent fiscal
years ending or ended January 28, 2022, January 29, 2021, January 31, 2020, February 1, 2019, February 2, 2018,
and February 3, 2017, respectively. Our fiscal year ends on the Friday closest to January 31. Our 2016 fiscal year
consisted of 53 weeks, while each of the remaining years listed consists of 52 weeks. All of the discussion and
analysis in this report should be read with, and is qualified in its entirety by, the Consolidated Financial Statements
and related notes.
Solely for convenience, our trademarks and tradenames may appear in this report without the ® or TM
symbol which is not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights
or the right to these trademarks and tradenames.
Cautionary Disclosure Regarding Forward-Looking Statements
We include “forward-looking statements” within the meaning of the federal securities laws throughout this
report, particularly under the headings “Business,” “Management’s Discussion and Analysis of Financial Condition
and Results of Operations,” and “Note 7 – Commitments and Contingencies,” among others. You can identify these
statements because they are not limited to historical fact or they use words such as “may,” “will,” “should,” “could,”
“can,” “would,” “believe,” “anticipate,” “project,” “plan,” “expect,” “estimate,” “goal,” “seek,” “ensure,”
“potential,” “opportunity,” “intend,” “predict,” “committed,” “likely,” “continue,” “strive,” “aim,” “scheduled,”
“focused on,” or “subject to” and similar expressions that concern our strategies, plans, initiatives, intentions or
beliefs about future occurrences or results. For example, all statements relating to, among others, our estimated and
projected expenditures, cash flows, results of operations, financial condition and liquidity; our plans and objectives
for, and expectations regarding, future operations, economic and competitive market conditions, growth or
initiatives, including but not limited to the number of planned store openings, remodels and relocations, store
formats or concepts, progress of merchandising, digital and other initiatives, trends in sales of consumable and non-
consumable products, customer traffic and basket size, and level of future costs and expenses; potential future stock
repurchases and cash dividends; anticipated borrowing under our unsecured revolving credit agreement and
commercial paper program; potential impact of the COVID-19 pandemic; potential impact of legal or regulatory
changes and our responses thereto, including the potential increase of federal, state and/or local minimum wage rates
or potential changes to the corporate tax rate; efforts to improve distribution and transportation efficiencies,
including self-distribution; efforts to improve our in-stock position, customer convenience proposition and store
labor productivity; or expected outcome or effect of pending or threatened legal disputes, litigation or audits are
forward-looking statements.
All forward-looking statements are subject to risks, uncertainties and other factors that may cause our
actual results to differ materially from those which we expected. Many of these statements are derived from our
operating budgets and forecasts, which are based on many detailed assumptions that we believe are reasonable.
However, it is very difficult to predict the effect of known factors, and we cannot anticipate all factors that could
affect future results.
Important factors that could cause actual results to differ materially from the expectations expressed or
implied in our forward-looking statements are disclosed under “Risk Factors” in Part I, Item 1A and elsewhere in
this document (including, without limitation, in conjunction with the forward-looking statements themselves and
under the heading “Critical Accounting Policies and Estimates”). All forward-looking statements are qualified in
their entirety by these and other cautionary statements that we make from time to time in our other SEC filings and
public communications. You should evaluate forward-looking statements in the context of these risks and
uncertainties and are cautioned not to place undue reliance on such statements. These factors may not contain all of
the factors that are important to you. We cannot assure you that we will realize the results or developments we
expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our
operations in the way we expect. Forward-looking statements in this report are made only as of the date hereof. We
undertake no obligation, and specifically disclaim any duty, to update or revise any forward-looking statement as a
result of new information, future events or otherwise, except as may be required by law.
2020 Form 10-K
3
ITEM 1. BUSINESS
General
PART I
We are among the largest discount retailers in the United States by number of stores, with 17,266 stores
located in 46 states as of February 26, 2021, with the greatest concentration of stores in the southern, southwestern,
midwestern and eastern United States. We offer a broad selection of merchandise, including consumable items,
seasonal items, home products and apparel. Our merchandise includes national brands from leading manufacturers,
as well as our own private brand selections with prices at substantial discounts to national brands. We offer our
customers these national brand and private brand products at everyday low prices (typically $10 or less) in our
convenient small-box locations.
Our History
J.L. Turner founded our Company in 1939 as J.L. Turner and Son, Wholesale. We were incorporated as a
Kentucky corporation under the name J.L. Turner & Son, Inc. in 1955, when we opened our first Dollar General
store. We changed our name to Dollar General Corporation in 1968 and reincorporated in 1998 as a Tennessee
corporation. Our common stock was publicly traded from 1968 until July 2007, when we merged with an entity
controlled by investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P., or KKR. In November 2009 our
common stock again became publicly traded on the New York Stock Exchange under the symbol “DG”, and in
December 2013 the entity controlled by investment funds affiliated with KKR sold its remaining shares of our
common stock.
COVID-19 Pandemic
Throughout 2020, the COVID-19 (coronavirus) pandemic resulted in widespread and continuing impacts
on the global economy and has affected our business, as well as our customers, suppliers, and other business
partners. In early March 2020, we began seeing heightened demand from customers, particularly for consumable
products such as paper, food, and cleaning products. Shortly thereafter, we also saw a significant increase in demand
for many non-consumable products, including home, seasonal and apparel, resulting in a significant overall mix shift
into non-consumable categories. We have also seen a shift in customer behavior toward trip consolidation, as
customers are shopping our stores less frequently than in the same period in 2019, but purchased a larger average
basket amount. To address the increased demand, we increased our hiring of new store associates and worked with
suppliers to incorporate new items in stores to meet the essential needs of customers while addressing certain
product shortages and vendor allocation limitations. We incurred significant incremental expenses related to the
pandemic, including appreciation bonuses for retail, distribution and transportation employees, as well as for health
and safety measures. We expect to continue to be affected, although the extent and duration is unknown, by the
COVID-19 pandemic and its effects on the economy in a variety of ways, potentially including changing consumer
demand (whether higher or lower) overall and in certain product categories, supply chain interruptions, increased
distribution and transportation costs, and increased costs in an effort to maintain safe work and shopping
environments.
Our Business Model
Our long history of profitable growth is founded on a commitment to a relatively simple business model:
providing a broad base of customers with their basic everyday and household needs, supplemented with a variety of
general merchandise items, at everyday low prices in conveniently located, small-box stores. We continually
evaluate the needs and demands of our customers and modify our merchandise selections and pricing accordingly,
while remaining focused on increasing profitability, cash generation and returns for our shareholders.
Our long-term operating priorities are: 1) driving profitable sales growth, 2) capturing growth
opportunities, 3) enhancing our position as a low-cost operator, and 4) investing in our diverse teams through
development, empowerment and inclusion. For more information on these operating priorities, see the “Executive
4
2020 Form 10-K
Overview” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations,
included in Part II, Item 7 of this report.
In 2020, we achieved our 31st consecutive year of positive same-store sales growth. We believe that this
growth, which has taken place in a variety of economic conditions, is a result of our compelling value and
convenience proposition, although no assurances can be given that we will continue to achieve positive same-store
sales growth in any given year and we currently believe it is unlikely that we will achieve positive same-store sales
growth in 2021 as a result of the unusually high sales results we experienced in 2020.
Compelling Value and Convenience Proposition. Our ability to deliver highly competitive prices in
convenient locations and our easy “in and out” shopping format create a compelling shopping experience that we
believe distinguishes us from other discount retailers as well as convenience, drug, grocery, online and mass
merchant retailers. Our slogan “Save time. Save money. Every day!”® summarizes our appeal to customers. We
believe our ability to effectively deliver both value and convenience allows us to succeed in small markets with
limited shopping alternatives, as well as in larger and more competitive markets. Our value and convenience
proposition is evidenced by the following attributes of our business model:
•
•
•
Everyday Low Prices on Quality Merchandise. Our research indicates that we offer a price
advantage over most food and drug retailers and that our prices are competitive with even the
largest discount retailers. Our ability to offer everyday low prices on quality merchandise is
supported by our low-cost operating structure and our strategy to maintain a limited number of
items per merchandise category, which we believe helps us maintain strong purchasing power. We
offer nationally advertised brands at these everyday low prices in addition to offering our own
private brands at substantially lower prices.
Convenient Locations. Our stores are conveniently located in a variety of rural, suburban and
urban communities. We seek to locate our stores in close proximity to our customers, which helps
drive customer loyalty and trip frequency and makes us an attractive alternative to large discount
and other large-box retail and grocery stores.
Time-Saving Shopping Experience. We strive to provide customers with a highly convenient, easy
to navigate shopping experience. Our small-box stores make it easier to get in and out quickly.
Our product offering includes most necessities, such as basic packaged and refrigerated or frozen
food and dairy products, cleaning supplies, paper products, health and beauty care items, greeting
cards and other stationery items, basic apparel, housewares, hardware and automotive supplies,
among others. Our convenient hours and broad merchandise offering allow our customers to fulfill
their requirements for basic goods and minimize their need to shop elsewhere.
Substantial Growth Opportunities. We believe we have substantial long-term growth potential in the U.S.,
and we have identified significant opportunities to add new stores in both existing and new markets. In addition, we
have opportunities to relocate or remodel locations within our existing store base to better serve our customers. Our
attractive store economics, including a relatively low initial investment and simple, low-cost operating model, and
our variety of store formats have allowed us to grow our store base to current levels and provide us significant
opportunities to continue our profitable store growth strategy.
Our Merchandise
We offer a focused assortment of everyday necessities, which we believe helps to drive frequent customer
visits, and key items in a broad range of general merchandise categories. Our product assortment provides the
opportunity for our customers to address most of their basic shopping needs with one trip. We offer a wide selection
of nationally advertised brands from leading manufacturers. Additionally, our private brand products offer even
greater value with options to purchase both products that are of comparable quality to national brands as well as
opening price point items, each at substantial discounts to the national brands.
2020 Form 10-K
5
Consumables is our largest merchandise category and includes paper and cleaning products (such as paper
towels, bath tissue, paper dinnerware, trash and storage bags, disinfectants, and laundry); packaged food (such as
cereals, canned soups and vegetables, condiments, spices, sugar and flour); perishables (such as milk, eggs, bread,
refrigerated and frozen food, beer and wine); snacks (such as candy, cookies, crackers, salty snacks and carbonated
beverages); health and beauty (such as over-the-counter medicines and personal care products including soap, body
wash, shampoo, cosmetics, dental hygiene and foot care products); pet (such as pet supplies and pet food); and
tobacco products.
Seasonal products include holiday items, toys, batteries, small electronics, greeting cards, stationery,
prepaid phones and accessories, gardening supplies, hardware, automotive and home office supplies.
Home products include kitchen supplies, cookware, small appliances, light bulbs, storage containers,
frames, candles, craft supplies and kitchen, bed and bath soft goods.
Apparel includes casual everyday apparel for infants, toddlers, girls, boys, women and men, as well as
socks, underwear, disposable diapers, shoes and accessories.
The percentage of net sales of each of our four categories of merchandise for the fiscal years indicated
below was as follows:
Consumables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.8 % 78.0 % 77.5 %
Seasonal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1 % 11.7 % 11.9 %
6.5 % 5.8 % 5.9 %
Home products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.6 % 4.5 % 4.7 %
Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 2019 2018
Our seasonal and home products categories typically account for the highest gross profit margins, and the
consumables category typically accounts for the lowest gross profit margin.
The Dollar General Store
The typical Dollar General store is operated by a store manager, one or more assistant store managers, and
three or more sales associates. Our stores generally feature a low-cost, no frills building with limited maintenance
capital, low operating costs, and a focused merchandise offering within a broad range of categories, allowing us to
deliver low retail prices while generating strong cash flows and capital investment returns. Our stores average
approximately 7,400 square feet of selling space, and approximately 75% of our stores are located in towns of
20,000 or fewer people. We generally have had good success in locating suitable store sites in the past, and we
believe that there is ample opportunity for new store growth in existing and new markets. In addition, we believe we
have significant opportunities available for our relocation and remodel programs.
Our store growth over the past three years is summarized in the following table:
Year
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Our Customers
Stores at
Beginning
Net
Stores Stores
of Year Opened Closed
64
900
14,534
67
15,370
975
101
16,278 1,000
Store
Stores at
Increase End of Year
15,370
16,278
17,177
836
908
899
Our customers seek value and convenience. Depending on their financial situation and geographic
proximity, customers’ reliance on Dollar General varies from fill-in shopping, to making periodic trips to stock up
on household items, to making weekly or more frequent trips to meet most essential needs. We generally locate our
stores and plan our merchandise selections to best serve the needs of our core customers, the low and fixed income
households often underserved by other retailers, and we are focused on helping them make the most of their
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2020 Form 10-K
spending dollars. At the same time, however, Dollar General shoppers from a wide range of income brackets and life
stages appreciate our quality merchandise as well as our attractive value and convenience proposition.
Our Suppliers
We purchase merchandise from a wide variety of suppliers and maintain direct buying relationships with
many producers of national brand merchandise. Despite our broad offering, we maintain only a limited number of
items per category, allowing us to keep our average costs low. Our three largest suppliers accounted for
approximately 9%, 8%, and 8%, respectively, of our purchases in 2020. Our private brands come from a wide
variety of suppliers. We directly imported approximately 5% of our purchases at cost in 2020.
In 2020, COVID-19 caused disruptions in our supply chain, making it more difficult to obtain certain
products in sufficient quantities to meet customer demand and increasing distribution and transportation costs. We
anticipate these COVID-19 effects to persist to some degree through at least the first half of 2021, although the
ultimate extent and duration of the COVID-19 pandemic and its effects are unknown. Prior to 2020, we have
generally been able to obtain sufficient quantities of core merchandise and in cases where one or more of our current
sources of supply became unavailable, we generally have been able to obtain alternative sources. Alternative sources
could increase our merchandise costs and supply chain lead time and expenses, result in a temporary reduction in
store inventory levels, reduce our selection, or reduce the quality of our merchandise, and an inability to obtain
alternative sources could adversely affect our sales.
Distribution and Transportation
Our stores are currently supported by distribution centers for both refrigerated and non-refrigerated
merchandise located strategically throughout our geographic footprint. We lease additional temporary warehouse
space as necessary to support our distribution needs. In addition to our traditional distribution centers, we now
operate multiple temperature-controlled distribution facilities in support of “DG Fresh”, our strategic, multi-phased
shift to self-distribution of frozen and refrigerated goods, such as dairy, deli and frozen products. We regularly
analyze and rebalance the network to ensure that it remains efficient and provides the service levels our stores
require. See “—Properties” below for additional information pertaining to our distribution centers.
Most of our merchandise flows through our distribution centers and is delivered to our stores by our private
fleet and by third-party trucking firms, utilizing our trailers. In addition, vendors or third-party distributors deliver or
ship certain food items and other merchandise directly to our stores.
Seasonality
The nature of our business is somewhat seasonal. Generally, our operating profit has been greater in the
fourth quarter, which includes the Christmas selling season, as compared with operating profit in each of the first
three quarters of our fiscal year. In addition, our quarterly results can be affected by the timing of certain holidays,
new store openings, remodels, relocations and store closings. Consumer behavior driven by the COVID-19
pandemic has resulted in a departure from seasonal norms we have experienced in recent years and may continue to
disrupt the historical quarterly cadence of our results of operations for an unknown period of time.
Our Competition
We operate in the basic discount consumer goods market, which is highly competitive with respect to price,
customers, store location, merchandise quality, assortment and presentation, service offerings, in-stock consistency,
customer service, promotional activity, employees, and market share. We compete with discount stores and many
other retailers, including mass merchandise, warehouse club, grocery, drug, convenience, variety, online, and certain
specialty stores. These other retail companies operate stores in many of the areas where we operate, and many of
them engage in extensive advertising and marketing efforts. Our direct competitors include Family Dollar, Dollar
Tree, Big Lots, 99 Cents Only and various local, independent operators, as well as Walmart, Target, Kroger, Aldi,
Walgreens, CVS, and Rite Aid, among others. Certain of our competitors have greater financial, distribution,
marketing and other resources than we do and may be able to secure better arrangements from suppliers than we
2020 Form 10-K
7
can. Competition is intense and we believe it will continue to be so, with certain competitors reducing their store
locations while others move into or increase their presence in our geographic and product markets and increase the
availability of mobile, web-based and other digital technology to facilitate a more convenient and competitive
customer online and in-store shopping experience.
We believe that we differentiate ourselves from other forms of retailing by offering consistently low prices
in a convenient, small-store format. We are able to maintain competitive prices due in part to our low-cost operating
structure and the relatively limited assortment of products offered. Purchasing large volumes of merchandise within
our focused assortment in each merchandise category allows us to keep our average product costs low, contributing
to our ability to offer competitive everyday low prices to our customers. See “—Our Business Model” above for
further discussion of our competitive situation.
Our Intellectual Property
We own marks that are registered with the United States Patent and Trademark Office and are protected
under applicable intellectual property laws, including, without limitation, Dollar General®, DG®, Clover Valley®,
and trueliving® along with variations and formatives of these trademarks. We attempt to obtain registration of our
trademarks whenever practicable and to pursue vigorously any infringement of those marks. Our trademark
registrations have various expiration dates; however, assuming that the trademark registrations are properly
renewed, they have a perpetual duration. We also hold an exclusive license to the Rexall brand through at least
March 5, 2029 and the Believe Beauty brand through at least March 23, 2022.
Human Capital Resources
At Dollar General, a foundational element in how we operate is exemplified in our fourth operating priority
– Investing in our diverse teams through development, empowerment and inclusion. Building on our core value of
respecting the dignity and differences of others, our goal is to create a work environment where each employee is
encouraged and empowered to bring their unique perspective and voice to work each day. Based on a talent
philosophy of “Attract, Develop, and Retain”, whether an individual works in a store, a distribution center, our store
support center or our international sourcing offices, over the last 80+ years, we have helped millions of individuals
start and progress in their careers, providing employees with numerous opportunities to gain new skills and develop
their talents, supported by our award-winning training and development programs.
Attract
We seek to provide market competitive compensation and benefits packages that attract talent to the
organization and then retain and incent them for performance. Although eligibility for and the level of benefits vary
depending on the employee’s full-time or part-time status, compensation level, date of hire, and/or length of service,
the broad range of benefits we provide or make available may include: medical, prescription, telemedicine, dental
and vision plans; flexible spending accounts; disability insurance; 401(k) plan; paid vacation; employee assistance
program with access to legal assistance and counseling; healthy lifestyle and disease management programs; a broad
range of discounts for products and services; parental leave; adoption assistance; and service award recognition. To
help measure the success of our overall employee compensation and benefits programs, we monitor employee
applicant flow and staffing levels across the organization, as well as employee turnover, particularly at the store
manager level.
Develop
As a testament to our employee development efforts, in February 2021, we were inducted into Training
magazine’s Hall of Fame, following two consecutive years as the magazine’s top training and development program
and rounding out 10 consecutive years among its Top 100 list. In 2020, we estimate we invested nearly three million
training hours in our employees to promote their education and development.
Our internal promotion rate helps us measure the success of our development programs. As of February
26, 2021, we employed approximately 158,000 full-time and part-time employees, including divisional and regional
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2020 Form 10-K
managers, district managers, store managers, other store personnel and distribution center and administrative
personnel. As of the end of 2020, approximately 73% of store managers and thousands of additional employees,
including several members of our senior leadership, have been promoted from within our organization.
Retain
To ensure we are creating an environment where our employees feel respected, safe, empowered, and
motivated, we regularly monitor retention and engagement levels across the organization through a variety of means,
working to understand what is important to our workforce and how we can best continue to meet their evolving
needs.
Compliance with Governmental Regulations
Our operations are subject to the applicable federal, state, local and foreign laws, rules, and regulations of
the jurisdictions in which we operate or conduct business. These laws, rules and regulations relate to, among other
things, the sale of products, including without limitation product and food safety, marketing and labeling;
information security and privacy; labor and employment; employee wages and benefits; health and safety; real
property; public accommodations; anti-bribery; financial reporting and disclosure; antitrust and fair competition;
anti money laundering; transportation; imports and customs; intellectual property; taxes; and environmental
compliance.
Although we routinely incur significant costs in complying with the laws and regulations applicable to the
Company, and we can make no guarantees that future such costs will not be material, to date, compliance with these
laws, rules and regulations has not had a material adverse effect on our capital expenditures, earnings or competitive
position. Many of our entry-level store employees are paid at rates in line with the applicable minimum wage, and
consequently, in certain situations, increases to such wage rates have increased our labor costs. If federal, state
and/or local minimum wage rates were to increase significantly and/or rapidly, compliance with such increases
could adversely affect our earnings. Additionally, if significant changes in the corporate tax rate occur in the future,
such change could adversely affect our overall effective tax rate and earnings. See “Risk Factors” in Part I, Item 1A
for additional information regarding government regulations that could impact our business.
Available Information
Our Internet website address is www.dollargeneral.com. The information on our website is not
incorporated by reference into, and is not a part of, this Form 10-K. We file with or furnish to the Securities and
Exchange Commission (the “SEC”) annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and amendments to those reports, proxy statements and annual reports to shareholders, and, from time
to time, registration statements and other documents. These documents are available free of charge to investors on or
through the Investor Information section of our website (https://investor.dollargeneral.com) as soon as reasonably
practicable after we electronically file them with or furnish them to the SEC. The SEC also maintains an internet site
that contains reports, proxy and information statements and other information regarding issuers, such as Dollar
General, that file electronically with the SEC. The address of that website is http://www.sec.gov.
2020 Form 10-K
9
ITEM 1A. RISK FACTORS
Investment in our Company involves risks. You should carefully consider the risks described below and the
other information in this report and other filings that we make from time to time with the SEC, including our
consolidated financial statements and accompanying notes. Any of the following risks could materially and
adversely affect our business, financial condition, results of operations or liquidity. These risks are not the only risks
we face. Our business, financial condition, results of operations or liquidity could also be adversely affected by
additional factors that apply to all companies generally or by risks not currently known to us or that we currently
view to be immaterial. We can provide no assurance and make no representation that our risk mitigation efforts,
although we believe they are reasonable, will be successful.
Business, Strategic and Competitive Risks
The COVID-19 pandemic has continued to impact our business, financial performance and financial
condition and could have a material adverse impact on our business, financial performance and financial
condition in the future.
The COVID-19 pandemic has resulted in widespread and continuing adverse impacts on, and volatility in,
the global economy and has continued to impact our business, employees, customers, suppliers, and other business
partners. Considerable uncertainty exists regarding the extent to which the COVID-19 pandemic will continue, as
well as the scope, duration and effectiveness of measures directed at containment and mitigation of the virus,
including travel bans and restrictions, quarantines, shelter-in-place orders, school closures, vaccination rollouts, and
business and government restrictions and shutdowns. These measures taken by national, state and local government
authorities to date have resulted in high levels of unemployment, are expected to have serious adverse impacts on
domestic and foreign economies, and could have a significant adverse impact on our core customer and her
spending, for an unknown length of time. The potential effect of economic stabilization efforts, including additional
government stimulus payments, food/nutrition assistance and enhanced unemployment benefits, is uncertain. If
customer spending on the goods we sell declines as a result of some or all of these factors, there could be a material
adverse impact on our business and results of operations.
We have been classified as an essential business in all locations where we operate, and as such, our stores
generally have remained open to serve our customers. While none of the below has resulted in a material adverse
impact on our business, financial performance or financial condition to date, we have experienced or are
experiencing certain effects of the COVID-19 pandemic, including but not limited to, the following:
• Supply chain disruptions, including shipping and procurement delays of certain goods from
international and domestic shipping origins, delivery delays to our stores as a result of COVID-19-
related absenteeism in one of our distribution centers, which necessitated servicing those stores from
other distribution centers for a limited period of time, and vendor restrictions on their sale to us of a
significant percentage of certain of our core products;
• Reduced or no availability of certain products in our stores as a result of supply chain disruptions
outlined above and extremely high customer demand for certain products which has outpaced available
supply;
•
• Temporary store and distribution center closings in order to allow for deep cleanings as needed, as well
as reduced store operating hours until early in the second quarter to allow for additional time to clean
the stores and re-stock shelves;
Increased distribution and transportation costs as a result of the effects outlined above, increased
carrier rates and greater driver shortages, increased overtime pay expenses due to reduced labor
availability, and demand for transportation services outpacing carrier supply;
Increased incremental expenses for certain items, including supplies for enhanced cleaning protocols,
personal protective equipment for employees in stores, distribution centers and corporate headquarters
(e.g., gloves, masks, hand sanitizer), and installation of plexiglass barriers at store registers;
In addition to the additional distribution overtime discussed above, increased labor expenses as a result
of awarding approximately $167 million in employee appreciation bonuses, significantly increasing
•
•
10
2020 Form 10-K
our hiring of new store employees, and the increased workload associated with the incremental sales
volume;
• COVID-19 and remote-work oriented phishing and similar cybersecurity attack attempts; and
•
Inability to perform physical inventories in our stores from mid-March through mid-May, which
prevented us from completing all of our planned store physical inventories for fiscal 2020, the effect of
which was immaterial for fiscal 2020.
Depending on the duration and severity of the COVID-19 pandemic, including whether there are additional
“waves”, other additional periods of increases or spikes in the number of COVID-19 cases or mutations thereof and
the availability, acceptance and efficacy of medical treatments and vaccines, which are uncertain and cannot be
predicted, as well as governmental authorities’ responses and requirements related to the pandemic, including the
pace and extent of the easing or removal of restrictions on businesses and customers when the pandemic does
subside or the reinstitution of more stringent regulations before the pandemic subsides, these experienced effects
could have a material adverse impact on our business, financial performance and financial condition in the future if
they increase in number, duration, and/or magnitude. We also could experience other effects that could aggravate or
increase the likelihood of the risk factors set forth herein and/or result in a material adverse impact on our business,
financial performance or financial condition, including but not limited to, the financial difficulties experienced by
our suppliers or business partners, including the financial failure of one or more of our international steamship line
vendors resulting in our inability to obtain our purchased goods in their possession; increased operating costs as a
result of increased government regulations and mandates requiring us to provide wage increases or premiums to
frontline employees (e.g., those imposed in certain counties in California and elsewhere), personal protective
equipment or personal hygiene supplies to customers or to increase store and distribution center cleaning protocols,
as well as increased store and/or distribution center closures as a result of increased government enforcement of any
such new regulations and mandates; increased litigation expenses resulting from employee or customer lawsuits,
including those related to the Company’s COVID-19 response and alleged employee or customer contraction;
increased insurance costs, medical claims costs and workers’ compensation claim costs and the impact of regulatory
and judicial changes in liability for workers’ compensation; and damage to our reputation if our response to the
COVID-19 pandemic is perceived as inadequate or inappropriate. Additionally, the COVID-19 pandemic may cause
or accelerate a shift in our core customer’s behaviors, expectations and shopping trends, which could result in lost
sales and market share if we are not able to successfully increase the pace of our strategic initiatives development,
particularly our digital strategic initiatives, and if our current digital shopping offerings do not continue to compete
effectively.
The extent to which the COVID-19 pandemic ultimately impacts our business, financial performance and
financial condition will depend on future developments, which are highly uncertain and cannot be predicted,
including, but not limited to, the duration and spread of the outbreak (and any variants thereof), its severity, the
actions to contain and mitigate the virus or treat its impact, and how quickly and to what extent normal economic
and operating conditions can resume. As a result, we may not be able to identify all risks ultimately faced from the
COVID-19 pandemic and its aftermath.
Economic factors may reduce our customers’ spending, impair our ability to execute our strategies and
initiatives, and increase our costs and expenses, which could result in materially decreased sales or profitability.
Many of our customers have fixed or low incomes and limited discretionary spending dollars. Any factor
that could adversely affect their disposable income could decrease our customers’ spending or cause them to shift
their spending to our lower margin product choices, which could result in materially decreased sales and/or
profitability. Factors that could reduce our customers’ disposable income include but are not limited to high
unemployment or underemployment levels or decline in real wages; inflation; pandemics (such as the COVID-19
pandemic); higher fuel, energy, healthcare and housing costs, interest rates, consumer debt levels, and tax rates; tax
law changes that negatively affect credits and refunds; lack of available credit; and decreases in, or elimination of,
government subsidies such as unemployment and food/nutrition assistance programs.
Many of the economic factors listed above, as well as commodity rates; transportation, lease and insurance
costs; wage rates (including the heightened possibility of increased federal, state and/or local minimum wage rates);
foreign exchange rate fluctuations; measures that create barriers to or increase the costs of international trade
2020 Form 10-K
11
(including increased import duties or tariffs); changes in applicable laws and regulations (including tax laws related
to the corporate tax rate); and other economic factors, also could impair our ability to successfully execute our
strategies and initiatives, as well as increase our cost of goods sold and selling, general and administrative expenses
(including real estate costs), and may have other adverse consequences that we are unable to fully anticipate or
control, all of which may materially decrease our sales or profitability.
Our plans depend significantly on strategies and initiatives designed to increase sales and profitability
and improve the efficiencies, costs and effectiveness of our operations, and failure to achieve or sustain these
plans could materially affect our results of operations.
We have short-term and long-term strategies and initiatives (such as those relating to merchandising, real
estate and new store development, store formats and concepts, digital, shrink, sourcing, private brand, inventory
management, supply chain, store operations, expense reduction, and technology) in various stages of testing,
evaluation, and implementation, which are designed to continue to improve our results of operations and financial
condition. The effectiveness of these initiatives is inherently uncertain, even when tested successfully, and is
dependent on consistency of training and execution, workforce stability, ease of execution and scalability, and the
absence of offsetting factors that can influence results adversely. The number and diverse geographic locations of
our stores and distribution centers and our decentralized field management also contribute to the challenging nature
of these factors. Other risk factors described herein also could negatively affect general implementation. Failure to
achieve successful or cost-effective implementation of our initiatives could materially and adversely affect our
business, results of operations and financial condition.
The success of our merchandising initiatives, particularly our non-consumable initiatives and efforts to
increase sales of higher margin products within the consumables category, further depends in part upon our ability to
predict the products that our customers will demand and to identify and timely respond to evolving trends in
consumer preferences and demographic mixes in our markets. If we are unable to select and timely obtain products
that are attractive to customers and at costs that allow us to sell them at an acceptable profit, or to effectively market
such products, it could result in materially decreased sales and profitability.
The success of our cold chain self-distribution initiative, DG Fresh, further depends in part on our ability to
effectively transition these distribution operations from our current service providers without business disruption, as
well as on the availability of certain supply chain resources, including temperature-controlled distribution centers,
refrigerated transportation equipment, and drivers. The success of our Fast Track initiative, which is designed to
enhance our in-store labor productivity, on-shelf availability and customer convenience, further depends in part on
successful implementation and maintenance of the necessary technology, customer interest and adoption of self-
checkout, our ability to gain cost efficiencies and control shrink levels from the initiative, and vendor cooperation.
We face intense competition that could limit our growth opportunities and materially and adversely
affect our results of operations and financial condition.
The retail business is highly competitive with respect to price, customers, store location, merchandise
quality, product assortment and presentation, service offerings, in-stock consistency, customer service, ease of
shopping experience, promotional activity, employees, and market share. We compete with discount stores and
many other retailers, including mass merchandise, warehouse club, grocery, drug, convenience, variety, online
retailers, and certain specialty stores. To maintain our competitive position, we may be required to lower prices,
either temporarily or permanently, and may have limited ability to increase prices in response to increased costs,
resulting in lower margins and reduced profitability. Certain of our competitors have greater financial, distribution,
marketing and other resources, and may be able to secure better arrangements with suppliers, than we.
Competition is intense, and is expected to continue to be so, with certain competitors reducing their store
locations while others enter or increase their presence in our geographic and product markets (including through the
expansion of availability of delivery services) and expand availability of mobile, web-based and other digital
technologies to facilitate a more convenient and competitive online and in-store shopping experience. If our
competitors or others were to enter our industry in a significant way, including through alliances or other business
combinations, it could significantly alter the competitive dynamics of the retail marketplace and result in
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2020 Form 10-K
competitors with greatly improved competitive positions, which could materially affect our financial performance.
Our ability to effectively compete will depend substantially upon our continued ability to develop and execute
compelling and cost-effective strategies and initiatives. If we fail to anticipate or respond effectively to competitive
pressures and industry changes, it could materially affect our results of operations and financial condition.
Operational Risks
If we cannot timely and cost-effectively execute our real estate projects and meet our financial
expectations, or if we do not anticipate or successfully address the challenges imposed by our expansion,
including into new states or urban areas, it could materially impede our planned future growth and our
profitability.
Delays in or failure to complete a significant portion of our real estate projects, or failure to meet our
financial expectations for these projects, could materially and adversely affect our growth and our profitability. Our
ability to timely open, relocate and remodel profitable stores and expand into additional market areas is a key
component of our planned future growth and may depend in part on: the availability of suitable store locations and
capital funding; the absence of entitlement process or occupancy delays, including zoning restrictions and moratoria
on small box discount retail development such as those passed by certain local governments in areas where we
operate or seek to operate, which, to date, have not materially impaired our ability to complete our planned real
estate projects or growth; the ability to negotiate acceptable lease and development terms (for example, real estate
development requirements and cost of building materials and labor), to cost-effectively hire and train qualified new
personnel, especially store managers, and to identify and accurately assess sufficient customer demand; and general
economic conditions.
We also may not anticipate or successfully address all of the challenges imposed by the expansion of our
operations, including into new states or urban areas where we have limited or no meaningful experience or brand
recognition. Those areas may have different competitive and market conditions, consumer tastes and discretionary
spending patterns than our existing markets, as well as higher cost of entry and operating costs. These factors may
cause our new stores to be less profitable than stores in our existing markets, which could slow future growth in
these areas. In addition, many new stores will be located in areas where we have existing stores, which inadvertently
may temporarily or permanently divert a larger than anticipated number of customers and sales from our existing
stores, thereby adversely affecting our overall financial performance.
Inventory shrinkage may negatively affect our results of operations and financial condition.
We experience significant inventory shrinkage. Although some level of inventory shrinkage is an
unavoidable cost of doing business, higher rates of inventory shrinkage or increased security or other costs to
combat inventory theft could adversely affect our results of operations and financial condition. There can be no
assurance that we will be successful in our efforts to contain or reduce inventory shrinkage.
Our cash flows from operations, profitability and financial condition may be negatively affected if we
are not successful in managing our inventory balances.
Our inventory balance represented approximately 48% of our total assets exclusive of goodwill, operating
lease assets, and other intangible assets as of January 29, 2021. Efficient inventory management is a key component
of our business success and profitability. We must maintain sufficient inventory levels and an appropriate product
mix to meet our customers’ demands without allowing those levels to increase such that the costs to store and hold
the goods unduly impacts our financial results or increases the risk of inventory shrinkage. If we do not accurately
predict customer trends, spending levels, or price sensitivity, we may have to take unanticipated markdowns to
dispose of the excess inventory, which also can adversely affect our financial results. We continue to focus on ways
to reduce these risks, but we cannot make assurances that we will be successful in our inventory management. If we
are not successful in managing our inventory balances, our cash flows from operations and financial condition may
be negatively affected.
2020 Form 10-K
13
Failure to maintain the security of our business, customer, employee or vendor information or to comply
with privacy laws could expose us to litigation, government enforcement actions and costly response measures,
and could materially harm our reputation and affect our business and financial performance.
In connection with sales, we transmit confidential credit and debit card information which is encrypted
using point-to-point encryption. We also have access to, collect or maintain certain private or confidential
information regarding our customers, employees and their dependents, and vendors, as well as our business. Some
of this information is stored electronically in connection with our e-commerce and mobile applications, some of
which may leverage third-party service providers. Additionally, we may share information with select vendors that
assist us in conducting our business. While we have implemented procedures and technology intended to protect
such information and require appropriate controls of our vendors, external attackers could compromise such controls
and result in unauthorized disclosure of such information, as attacks are becoming increasingly sophisticated, may
include attacks on our third-party business partners, and do not always or immediately produce detectable indicators
of compromise. Moreover, inadvertent or malicious internal personnel actions could result in a defeat of security
measures and a compromise of our or our third-party vendors’ information systems. Like other retailers, we and our
vendors have experienced threats to, and infrequent immaterial incidents involving, data and systems, including by
perpetrators of attempted random or targeted malicious attacks; computer malware, ransomware, bots, or other
destructive or disruptive software; and attempts to misappropriate our information and cause system failures and
disruptions. If attackers obtain customer, employee or vendor passwords through unrelated third-party breaches, and
if impacted customers, employees, or vendors do not employ good online security practices (e.g., use the same
password across different sites), these passwords could be used to gain access to their information or accounts with
us in certain situations.
Because we accept debit and credit cards for payment, we are subject to industry data protection standards
and protocols, such as the Payment Card Industry Data Security Standards, issued by the Payment Card Industry
Security Standards Council. Nonetheless, we may be vulnerable to, and unable to detect and appropriately respond
to, cardholder data security breaches and data loss, including successful attacks on applications, systems, or
networks.
A significant security breach of any kind experienced by us or one of our vendors, which could be
undetected for a period of time, or a significant failure by us or one of our vendors to comply with applicable
privacy and information security laws, regulations and standards could expose us to risks of data loss, litigation,
government enforcement actions, fines or penalties, credit card brand assessments, negative publicity and
reputational harm, business disruption and costly response measures (e.g., providing notification to, and credit
monitoring services for, affected individuals, as well as further upgrades to our security measures) which may not be
covered by or may exceed the coverage limits of our insurance policies, and could materially disrupt our operations.
Any resulting negative publicity could significantly harm our reputation which could cause us to lose market share
as a result of customers discontinuing the use of our e-commerce and mobile applications or debit or credit cards in
our stores or not shopping in our stores altogether and could materially and adversely affect our business and
financial performance.
Material damage or interruptions to our information systems as a result of external factors, staffing
shortages or challenges in maintaining or updating our existing technology or developing or implementing new
technology could materially and adversely affect our business and results of operations.
We depend on a variety of information technology systems, including systems owned and managed by
third-party vendors, for the efficient functioning of our business, including, without limitation, transaction
processing and the management of our employees, facilities, logistics, inventories, stores and customer-facing digital
applications and operations. Our technology initiatives may not deliver desired results or may do so on a delayed
schedule. Additionally, such systems are subject to damage or interruption from power surges and outages, facility
damage, physical theft, computer and telecommunications failures, inadequate or ineffective redundancy, malicious
code (including malware, ransomware, or similar), successful attacks (e.g., account compromise; phishing; denial of
service; and application, network or system vulnerability exploitation), software upgrade failures or code defects,
natural disasters and human error. Design defects, damage to, or interruption to these systems may require a
14
2020 Form 10-K
significant investment to repair or replace, disrupt our operations, result in the loss or corruption of critical data, and
harm our reputation, all of which could materially and adversely affect our business or results of operations.
We also rely heavily on our information technology staff. Failure to meet these staffing needs may
negatively affect our ability to fulfill our technology initiatives while continuing to provide maintenance on existing
systems. We rely on third parties to maintain and periodically upgrade many of these systems so that they can
continue to support our business. We license the software programs supporting many of our systems from
independent software developers. The inability of these vendors, developers or us to continue to maintain and
upgrade these systems and software programs could disrupt or reduce the efficiency of our operations or retain
vulnerability exploitation risk if we were unable to convert to alternate systems in an efficient and timely manner
and could expose us to greater risk of a successful attack. In addition, costs and delays associated with the
implementation of new or upgraded systems and technology, including the migration of applications to the cloud or
our current implementation of our new point of sale system, with maintenance or adequate support of existing
systems also could disrupt or reduce the efficiency of our operations, fail to operate as designed, result in the
potential loss or corruption of data or information, disrupt operations and affect our ability to meet business and
reporting requirements and adversely affect our profitability.
A significant disruption to our distribution network, the capacity of our distribution centers or the timely
receipt of inventory could adversely affect sales or increase our transportation costs, which would decrease our
profitability.
We rely on our distribution and transportation network to provide goods to our stores timely and
cost-effectively. Using various transportation modes, including ocean, rail, and truck, we and our vendors move
goods from vendor locations to our distribution centers and our stores. Any disruption, unanticipated or unusual
expense or operational failure related to this process (e.g., delivery delays, including as a result of pandemic
outbreaks, or increases in transportation costs (such as those we have experienced in fiscal 2020 and continue to
experience), including increased fuel costs, import freight costs, carrier or driver wages as a result of driver
shortages; a decrease in transportation capacity for overseas shipments or port closures; labor shortages; or work
stoppages or slowdowns) could negatively impact sales and profits. Labor shortages or work stoppages in the
transportation industry or disruptions to the national and international transportation infrastructure that necessitate
our securing alternative labor or shipping suppliers could also increase our costs or otherwise negatively affect our
business. The COVID-19 pandemic disrupted the global and domestic transportation and distribution of goods and
resulted in product delivery delays and higher delivery prices. The supply chain disruptions that we have
experienced to date as a result of the COVID-19 pandemic did not have a material negative impact on our financial
results in fiscal 2020. However, depending on the continued extent and duration of the COVID-19 pandemic, our
distribution network, results of operations (including sales) or future business may be materially and adversely
impacted.
We maintain a network of distribution facilities and are moving forward with plans to build or lease new
facilities to support our growth objectives and strategic initiatives. Delays in opening such facilities could adversely
affect our financial performance by slowing store growth or the rollout of certain strategic initiatives such as our DG
Fresh initiative, which may in turn reduce revenue growth, or by increasing transportation and product costs. In
addition, distribution-related construction or expansion projects entail risks that could cause delays and cost
overruns, such as: shortages of materials or skilled labor; work stoppages; unforeseen construction, scheduling,
engineering, environmental or geological problems; weather interference; fires or other casualty losses; and
unanticipated cost increases. For these reasons, the completion date and ultimate cost of these projects could differ
significantly from initial expectations, and we cannot guarantee that any project will be completed on time or within
established budgets.
Risks associated with or faced by our suppliers could adversely affect our financial performance.
We source our merchandise from a wide variety of domestic and international suppliers, and we depend on
them to supply merchandise in a timely and efficient manner. In 2020, our largest supplier accounted for
approximately 9% of our purchases, and our second and third largest suppliers each accounted for approximately 8%
of our purchases. If one or more of our current sources of supply became unavailable, we believe we generally
2020 Form 10-K
15
would be able to obtain alternative sources, but it could increase our merchandise costs and supply chain lead time,
result in a temporary reduction in store inventory levels, and reduce the selection and quality of our merchandise. An
inability to obtain alternative sources could materially decrease our sales. Additionally, if a supplier fails to deliver
on its commitments, we could experience merchandise out-of-stocks that could lead to lost sales and reputational
harm. Further, failure of suppliers to meet our compliance protocols could prolong our procurement lead time,
resulting in lost sales and adverse margin impact.
We directly imported approximately 5% of our purchases (measured at cost) in 2020, but many of our
domestic vendors directly import their products or components of their products. Changes to the prices and flow of
these goods often are for reasons beyond our control, such as political or civil unrest, acts of war, currency
fluctuations, disruptions in maritime lanes, port labor disputes, economic conditions and instability in countries in
which foreign suppliers are located, the financial instability of suppliers, failure to meet our terms and conditions or
our standards, issues with our suppliers’ labor practices or labor problems they may experience (such as strikes,
stoppages or slowdowns, which could also increase labor costs during and following the disruption), the availability
and cost of raw materials, pandemic outbreaks, merchandise quality or safety issues, transport availability and cost,
increases in wage rates and taxes, transport security, inflation, and other factors relating to suppliers and the
countries in which they are located or from which they import. Such changes could adversely affect our operations
and profitability.
While we are working to diversify our sources of imported goods, a substantial amount of our imported
merchandise comes from China, and thus, a change in the Chinese leadership, the effects of pandemic outbreaks
including COVID-19, economic and market conditions, internal economic stimulus actions, or currency or other
policies, as well as trade relations between China and the United States and increases in costs of labor, could
negatively impact our merchandise costs. We experienced delays in the receipt of certain goods from international
and domestic shipping origins as a result of the COVID-19 pandemic in fiscal 2020, but these pandemic-related
supply chain disruptions did not have a material negative impact on our financial results in fiscal 2020. Depending
on the continued extent and duration of the COVID-19 pandemic, our supply chain, results of operations (including
sales) or future business may be materially and adversely impacted. In addition, the United States’ foreign trade
policies, duties, tariffs and other impositions on imported goods, trade sanctions imposed on certain countries
(particularly China), import limitations on certain types of goods or of goods containing certain materials from other
countries and other factors relating to foreign trade and port labor agreements are beyond our control. These and
other factors affecting our suppliers and our access to products could adversely affect our business and financial
performance. If we increase our product imports from foreign vendors, the risks associated with these imports also
will increase, and we may be exposed to additional or different risks as we increase imports of goods produced in
countries other than China.
Natural disasters and unusual weather conditions (whether or not caused by climate change), pandemic
outbreaks or other health crises, political or civil unrest, acts of violence or terrorism, and disruptive global
political events could disrupt business and result in lower sales and otherwise adversely affect our financial
performance.
The occurrence of one or more natural disasters, such as hurricanes, fires, floods, tornadoes and
earthquakes, unusual weather conditions, pandemic outbreaks or other health crises (including but not limited to the
COVID-19 pandemic), political or civil unrest, acts of violence or terrorism (including within our stores, distribution
centers or other Company property), or disruptive global political events or similar disruptions could adversely
affect our reputation, business and financial performance. If any of these events result in the closure, or a limitation
on operating hours, of one or more of our distribution centers, a significant number of stores, our sourcing offices,
our corporate headquarters or data center or impact one or more of our key suppliers, our operations and financial
performance could be materially and adversely affected through an inability or reduced ability to make deliveries,
process payroll or provide other support functions to our stores and through lost sales. These events also could affect
consumer shopping patterns or prevent customers from reaching our stores, which could lead to lost sales and higher
markdowns (e.g., during our first accounting period of fiscal 2021, we lost approximately 8,400 store operating days
as a result of closures due to winter weather across the United States), or result in increases in fuel or other energy
prices, fuel shortage(s), new store or distribution center opening delays, the temporary lack of an adequate work
force in a market, the temporary or long-term disruption of product availability in our stores, the temporary or long-
16
2020 Form 10-K
term inability to obtain or access technology needed to effectively run our business, disruption of our utility services
or information systems, and damage to our reputation. These events may also increase the costs of insurance if they
result in significant loss of property or other insurable damage by us or in the market more generally.
Product liability, product recall or other product safety or labeling claims could adversely affect our
business, reputation and financial performance.
We are dependent on our vendors to ensure that the products we buy from them comply with applicable
product safety and labeling laws and regulations and to inform us of all applicable restrictions on the sale of such
products. Nonetheless, product liability, personal injury or other claims may be asserted against us relating to
product contamination, tampering, expiration, mislabeling, recall and other safety or labeling issues, including those
relating to products that we may self-distribute through our DG Fresh initiative.
We seek but may not be successful in obtaining contractual indemnification and insurance coverage for
product-related claims and issues from our vendors. If we do not have adequate contractual indemnification or
insurance available, or our vendors fails to adhere to their obligations to us, such claims could materially and
adversely affect our business, financial condition and results of operations. Our ability to obtain indemnification
from foreign vendors may be hindered by our ability to obtain jurisdiction over them to enforce contractual
obligations. Even with adequate insurance and indemnification, such claims could significantly harm our reputation
and consumer confidence in our products and we could incur significant litigation expenses, which also could
materially affect our results of operations even if a product liability claim is unsuccessful or not fully pursued.
Our current insurance program may expose us to unexpected costs and negatively affect our financial
performance.
Our insurance coverage reflects deductibles, self-insured retentions, limits of liability and similar
provisions that we believe are prudent based on our operations. However, there are types of losses we may incur but
against which we cannot be insured or which we believe are not economically reasonable to insure, such as losses
due to acts of war, certain crimes (including employee crime), certain wage and hour and other employment-related
claims and litigation, actions based on certain consumer protection laws, and some natural and other disasters or
similar events. If we incur material uninsured losses, our financial performance could suffer. Certain material events
have resulted, and may result again in the future, in sizable losses for the insurance industry and adversely affect the
availability of adequate insurance coverage or result in excessive premium increases. To offset negative insurance
market trends, we may elect to self-insure, accept higher deductibles or reduce the amount of coverage. In addition,
we self-insure a significant portion of expected losses under our workers’ compensation, automobile liability,
general liability (including claims made against certain of our landlords), property loss, and group health insurance
programs. Significant changes in actuarial assumptions and management estimates underlying our recorded
liabilities for these losses, including any expected increases in medical and indemnity costs, could result in
materially different expenses than expected under these programs, which could materially and adversely affect our
results of operations and financial condition. Although we maintain property insurance for catastrophic events at our
store support center and distribution centers, we are effectively self-insured for other property losses. If we
experience a greater number of these losses than we anticipate, our financial performance could be adversely
affected.
Failure to attract, develop and retain qualified employees while controlling labor costs, as well as other
labor issues, could adversely affect our financial performance.
Our future growth and performance, positive customer experience and legal and regulatory compliance
depends on our ability to attract, develop, retain and motivate qualified employees while operating in an industry
challenged by historically high rates of employee turnover. Our ability to meet our labor needs, while controlling our
labor costs, is subject to many external factors, including competition for and availability of qualified personnel,
unemployment levels, wage rates (including the heightened possibility of increased federal, state and/or local
minimum wage rates), health and other insurance costs, changes in employment and labor laws or other workplace
regulations (including those relating to employee benefit programs such as health insurance and paid leave
programs), employee activism, and our reputation and relevance within the labor market. If we are unable to attract,
2020 Form 10-K
17
develop and retain adequate numbers of qualified employees, our operations, customer service levels, legal and
regulatory compliance, and support functions could suffer. In addition, to the extent a significant portion of our
employee base unionizes, or attempts to unionize, our labor and other related costs could increase. Our ability to
pass along labor and other related costs to our customers is constrained by our everyday low price model, and we
may not be able to offset such increased costs elsewhere in our business.
Our success depends on our executive officers and other key personnel. If we lose key personnel or are
unable to hire additional qualified personnel, our business may be harmed.
Our future success depends to a significant degree on the skills, experience and efforts of our executive
officers and other key personnel. The unexpected loss of the services of any of such persons could adversely affect
our operations. There can be no assurance that our executive succession planning, retention or hiring efforts will be
successful. Competition for skilled and experienced management personnel is intense, and a failure to attract and
retain new qualified personnel could adversely affect our operations.
Our private brands may not be successful in improving our gross profit rate and may increase certain of
the risks we face.
The sale of private brand items is an important component of our sales growth and gross profit rate
enhancement plans. Broad market acceptance of our private brands depends on many factors, including pricing,
quality, customer perception, and timely development and introduction of new products. We cannot give assurance
that we will achieve or maintain our expected level of private brand sales. The sale and expansion of these offerings
also subjects us to or increases certain risks, such as: product liability claims and product recalls; disruptions in raw
material and finished product supply and distribution chains; inability to successfully protect our proprietary rights;
claims related to the proprietary rights of third parties; supplier labor and human rights issues, and other risks
generally encountered by entities that source, sell and market exclusive branded offerings for retail. Failure to
appropriately address these risks could materially and adversely affect our private brand initiatives, reputation,
results of operations and financial condition.
Because our business is somewhat seasonal, adverse events during the fourth quarter could materially
affect our financial statements as a whole.
Primarily because of sales of Christmas-related merchandise, our most profitable sales mix generally
occurs in the fourth quarter. In anticipation of this holiday, we purchase substantial amounts of seasonal inventory,
and if sales fall below seasonal norms or our expectations it could result in unanticipated markdowns. Adverse
events, such as deteriorating economic conditions, high unemployment rates, high gas prices, transportation
disruptions, or unusual or unanticipated adverse weather could result in lower-than-planned sales during the
Christmas selling season, which in turn could reduce our profitability and otherwise adversely affect our financial
performance and operating results.
Regulatory, Legal, Compliance and Accounting Risks
A significant change in governmental regulations and requirements could materially increase our cost
of doing business, and noncompliance with governmental regulations could materially and adversely affect our
financial performance.
We routinely incur significant costs in complying with numerous and frequently changing laws and
regulations. The complexity of this regulatory environment and related compliance costs continue to increase due to
additional legal and regulatory requirements, our expanding operations, and increased regulatory scrutiny and
enforcement efforts. New or revised laws, regulations, policies and related interpretations and enforcement practices,
particularly those dealing with the sale of products, including without limitation, product and food safety, marketing
or labeling; information security and privacy; labor and employment; employee wages and benefits; health and
safety; imports and customs; taxes; and environmental compliance, may significantly increase our expenses or
require extensive system and operating changes that could materially increase our cost of doing business. Violations
of applicable laws and regulations or untimely or incomplete execution of a required product recall can result in
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2020 Form 10-K
significant penalties (including loss of licenses, eligibility to accept certain government benefits such as SNAP or
significant fines), class action or other litigation, governmental investigation or action and reputational damage.
Additionally, changes in tax laws (including those related to the corporate tax rate), the interpretation of existing
laws, or our failure to sustain our reporting positions on examination could adversely affect our overall effective tax
rate. Furthermore, significant and/or rapid increases to federal, state and/or local minimum wage rates could
adversely affect our earnings if we are not able to otherwise offset these increased labor costs elsewhere in our
business.
Legal proceedings may adversely affect our reputation, business, results of operations and financial
condition.
Our business is subject to the risk of litigation or other legal proceedings by employees, consumers,
suppliers, competitors, shareholders, government agencies and others through private actions, class actions, multi-
district litigation, arbitrations, derivative actions, administrative proceedings, regulatory actions or other litigation.
For example, we are involved in certain legal proceedings as discussed in Note 7 to the consolidated financial
statements. The outcome of legal proceedings, particularly class action or multi-district litigation or mass
arbitrations and regulatory actions, can be difficult to assess or quantify. Plaintiffs in these types of lawsuits may
seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss may remain unknown
for lengthy periods. In addition, certain of these matters, if decided adversely to us or settled by us, may result in
liability material to our financial statements as a whole or may negatively affect our operating results if changes to
our business operations are required, and sometimes these developments are unanticipated. Legal proceedings in
general, and class actions, multi-district litigation, governmental investigations and actions and derivative actions in
particular, can be expensive and disruptive, and adverse publicity could harm our reputation, regardless of the
validity of the allegations. As a result, legal proceedings may adversely affect our business, results of operations and
financial condition. See also Note 7 to the consolidated financial statements.
New accounting guidance or changes in the interpretation or application of existing accounting
guidance could adversely affect our financial performance.
The implementation of new accounting standards could require certain systems, internal process and
controls and other changes that could increase our operating costs, and result in changes to our financial statements.
In 2019, for example, the implementation of accounting standards related to leases, as issued by the Financial
Accounting Standards Board, required us to make significant changes to our lease management and other accounting
systems, and resulted in a material impact to our consolidated financial statements.
U.S. generally accepted accounting principles and related accounting pronouncements, implementation
guidelines and interpretations with regard to a wide range of matters that are relevant to our business involve many
subjective assumptions, estimates and judgments by our management. Changes in these rules or their interpretation
or in underlying management assumptions, estimates or judgments could significantly change our reported or
expected financial performance. The outcome of such changes could include litigation or regulatory actions which
could adversely affect our financial condition and results of operations.
Financial and Capital Market Risks
Deterioration in market conditions or changes in our credit profile could adversely affect our business
operations and financial condition.
We rely on the positive cash flow we generate from our operating activities and our access to the credit and
capital markets to fund our operations, growth strategy, and return of cash to our shareholders through share
repurchases and dividends. Changes in the credit and capital markets, including market disruptions, limited liquidity
and interest rate fluctuations, may increase the cost of financing or restrict our access to these potential sources of
future liquidity. Our continued access to liquidity sources on favorable terms depends on multiple factors, including
our operating performance and credit ratings. Our debt securities currently are rated investment grade, and a
downgrade of this rating likely would negatively impact our access to the debt capital markets and increase our cost
of borrowing. As a result, disruptions in the debt markets or any downgrade of our credit ratings could adversely
2020 Form 10-K
19
affect our business operations and financial condition and our ability to return cash to our shareholders. We can
make no assurances that our ability to obtain additional financing through the debt markets will not be adversely
affected by economic conditions or that we will be able to maintain or improve our current credit ratings.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
As of February 26, 2021, we operated 17,266 retail stores located in 46 states as follows:
State
Alabama . . . . . . . . . . . .
Arizona . . . . . . . . . . . . .
Arkansas . . . . . . . . . . . .
California . . . . . . . . . . .
Colorado . . . . . . . . . . . .
Connecticut . . . . . . . . . .
Delaware . . . . . . . . . . . .
Florida . . . . . . . . . . . . . .
Georgia . . . . . . . . . . . . .
Illinois . . . . . . . . . . . . . .
Indiana. . . . . . . . . . . . . .
Iowa . . . . . . . . . . . . . . . .
Kansas . . . . . . . . . . . . . .
Kentucky . . . . . . . . . . . .
Louisiana . . . . . . . . . . . .
Maine . . . . . . . . . . . . . .
Maryland . . . . . . . . . . . .
Massachusetts . . . . . . . .
Michigan . . . . . . . . . . . .
Minnesota . . . . . . . . . . .
Mississippi . . . . . . . . . .
Missouri . . . . . . . . . . . .
Nebraska . . . . . . . . . . . .
Number of Stores State
829
125
474
238
62
71
49
940
963
610
607
290
253
616
594
61
147
53
612
179
563
573
132
Nevada . . . . . . . . . . . . .
New Hampshire . . . . . .
New Jersey . . . . . . . . . .
New Mexico . . . . . . . . .
New York . . . . . . . . . . .
North Carolina . . . . . . .
North Dakota . . . . . . . .
Ohio . . . . . . . . . . . . . . .
Oklahoma . . . . . . . . . . .
Oregon . . . . . . . . . . . . .
Pennsylvania . . . . . . . .
Rhode Island . . . . . . . . .
South Carolina . . . . . . .
South Dakota . . . . . . . .
Tennessee . . . . . . . . . . .
Texas . . . . . . . . . . . . . . .
Utah . . . . . . . . . . . . . . . .
Vermont . . . . . . . . . . . .
Virginia . . . . . . . . . . . . .
Washington. . . . . . . . . .
West Virginia . . . . . . . .
Wisconsin . . . . . . . . . . .
Wyoming . . . . . . . . . . .
Number of Stores
21
42
165
100
524
916
51
903
480
65
826
21
584
63
856
1,626
11
38
445
10
257
216
5
Most of our stores are located in leased premises. Individual store leases vary as to their terms, rental
provisions and expiration dates. Many stores, including a significant portion of our new stores, are subject to build-
to-suit arrangements with landlords, which typically carry a primary lease term of up to 15 years with multiple
renewal options. We also have stores subject to shorter-term leases, and many of these leases have renewal options.
As of February 26, 2021, we operated 17 distribution centers for non-refrigerated products, nine cold
storage distribution centers, and one combination distribution center which has both refrigerated and non-
refrigerated products. We lease 12 of these facilities and the remainder are owned. We have a total of 17.5 million
square feet of non-refrigerated space and a total of 2.3 million square feet of cold storage space. Approximately 7.25
acres of the land for one of the distribution centers is subject to a ground lease. We also leased approximately 1.1
million square feet of additional warehouse space in support of our distribution network for non-refrigerated
merchandise. We are currently in the process of constructing one cold storage distribution center and one
combination distribution center and are adding cold storage to one of our existing non-refrigerated distribution
centers, all of which are expected to be operational in either 2021 or 2022.
Our executive offices are located in approximately 302,000 square feet of owned buildings and
approximately 42,000 square feet of leased office space in Goodlettsville, Tennessee.
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2020 Form 10-K
ITEM 3. LEGAL PROCEEDINGS
The information contained in Note 7 to the consolidated financial statements under the heading “Legal
proceedings” contained in Part II, Item 8 of this report is incorporated herein by this reference.
ITEM 4. MINE SAFETY DISCLOSURES
None.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Information regarding our current executive officers as of March 19, 2021 is set forth below. Each of our
executive officers serves at the discretion of our Board of Directors and is elected annually by the Board to serve
until a successor is duly elected. There are no familial relationships between any of our directors or executive
officers.
Name
Todd J. Vasos . . . . . . . . . . . .
John W. Garratt . . . . . . . . . .
Jeffery C. Owen . . . . . . . . . .
Michael J. Kindy . . . . . . . . .
Kathleen A. Reardon . . . . . .
Steven G. Sunderland . . . . .
Emily C. Taylor . . . . . . . . . .
Rhonda M. Taylor . . . . . . . .
Carman R. Wenkoff . . . . . . .
Anita C. Elliott . . . . . . . . . . .
Age
59
52
51
55
49
57
45
53
53
56
Position
Chief Executive Officer and Director
Executive Vice President and Chief Financial Officer
Chief Operating Officer
Executive Vice President, Global Supply Chain
Executive Vice President and Chief People Officer
Executive Vice President, Store Operations
Executive Vice President and Chief Merchandising Officer
Executive Vice President and General Counsel
Executive Vice President and Chief Information Officer
Senior Vice President and Chief Accounting Officer
Mr. Vasos has served as Chief Executive Officer and a member of our Board since June 2015. He joined
Dollar General in December 2008 as Executive Vice President, Division President and Chief Merchandising Officer
and was promoted to Chief Operating Officer in November 2013. Prior to joining Dollar General, Mr. Vasos served
in executive positions with Longs Drug Stores Corporation for seven years, including Executive Vice President and
Chief Operating Officer (February 2008 to November 2008) and Senior Vice President and Chief Merchandising
Officer (2001 to 2008), where he was responsible for all pharmacy and front-end marketing, merchandising,
procurement, supply chain, advertising, store development, store layout and space allocation, and the operation of
three distribution centers. He also previously served in leadership positions at Phar-Mor Food and Drug Inc. and
Eckerd Corporation. Mr. Vasos has served as a director of KeyCorp since July 2020.
Mr. Garratt has served as Executive Vice President and Chief Financial Officer since December 2015. He
joined Dollar General in October 2014 as Senior Vice President, Finance & Strategy and subsequently served as
Interim Chief Financial Officer from July 2015 to December 2015. Mr. Garratt previously held various positions of
increasing responsibility in corporate strategy and financial planning with Yum! Brands, Inc., one of the world’s
largest restaurant companies, between May 2004 and October 2014, including Vice President, Finance and Division
Controller for the KFC division and earlier for the Pizza Hut division and for Yum Restaurants International
(October 2013 to October 2014); Senior Director, Yum Corporate Strategy (March 2010 to October 2013), reporting
directly to the corporate Chief Financial Officer and leading corporate strategy as well as driving key cross-
divisional initiatives; and various other financial positions. He previously held financial management positions at
Alcoa Inc. (April 2002 to May 2004) and General Electric (March 1999 to April 2002), after beginning his career
with Alcoa in May 1990. Mr. Garratt has served as a director of Humana Inc. since February 2020.
Mr. Owen has served as Chief Operating Officer since August 2019. He returned to Dollar General in June
2015 as Executive Vice President of Store Operations, with over 21 years of previous employment experience with
the Company. Prior to his departure from Dollar General in July 2014, he was Senior Vice President, Store
Operations. Prior to August 2011, Mr. Owen served as Vice President, Division Manager, and from November
2006 to March 2007 he served as Retail Division Manager. Prior to November 2006, he was Senior Director,
2020 Form 10-K
21
Operations Process Improvement. Mr. Owen also served the Company in various operations roles of increasing
importance and responsibility from December 1992 to September 2004. Mr. Owen has served as a director of
Kirkland’s Inc. since March 2015.
Mr. Kindy has served as Executive Vice President, Global Supply Chain since August 2018. As previously
announced, Mr. Kindy plans to retire from Dollar General effective April 15, 2021. He joined Dollar General as
Vice President, Distribution Centers in December 2008, became Vice President, Transportation in May 2013, and
was promoted to Senior Vice President, Global Supply Chain in June 2015. Prior to joining Dollar General, Mr.
Kindy had 14 years of grocery distribution management and 5 years of logistics and distribution consulting
experience. He served as Senior Director, Warehouse Operations, for ConAgra Foods from November 2007 to
December 2008. Since beginning his career in July 1989, Mr. Kindy also held various distribution and warehouse
leadership positions at Safeway, Inc., Crum & Crum Logistics, and Specialized Distribution Management, Inc., and
served as a principal consultant for PricewaterhouseCoopers.
Ms. Reardon has served as Executive Vice President and Chief People Officer since August 25, 2020. She
joined Dollar General as Director, Human Resources in September 2009 and was promoted to Vice President, Talent
Management in October 2012. She became Vice President, Retail Human Resources in October 2014 and was
promoted to Senior Vice President, Human Resources in March 2019 and to Senior Vice President and Chief People
Officer in May 2019. Prior to joining Dollar General, Ms. Reardon held several positions of increasing responsibility
at Centex from August 2005 until September 2009, serving as Director of Human Resources from October 2007
until September 2009. Since beginning her career in May 1998, Ms. Reardon also held various roles with Carrier
Corporation, including Manager of Human Resources from August 2003 until August 2005, and was also a Career
Consultant at the Darden Graduate School of Business Administration, University of Virginia, from August 2001
until August 2003.
Mr. Sunderland has served as Executive Vice President, Store Operations, since August 2019. He joined
Dollar General as Senior Vice President, Store Operations, in September 2014. Mr. Sunderland previously served as
Senior Vice President, Retail Operations, of Office Depot, Inc. (November 2013 to January 2014); Senior Vice
President, Retail Operations, of OfficeMax Incorporated (May 2012 to November 2013); Chief Operating Officer of
Bally Total Fitness Holding Corporation (2011 to April 2012); and World Kitchen, LLC’s President of Retail (2009
to 2011). Mr. Sunderland began his career with Sears in 1987, holding various positions of increasing responsibility,
including Vice President of Strategic Operations for Sears Holdings Corporation from 2007 until 2009.
Ms. E. Taylor has served as Executive Vice President and Chief Merchandising Officer since September
25, 2020. She joined Dollar General in 1998 and held roles of increasing responsibility in investor relations,
financial planning and analysis, merchandise planning, pricing and merchandising operations prior to her promotion
to Vice President, Pricing & Merchandise Data Optimization in March 2011. She served as Vice President,
Merchandising Operations (March 2012 to April 2014) and was subsequently promoted to Senior Vice President,
General Merchandise Manager in April 2014. She most recently served as Senior Vice President, Channel
Innovation (September 2019 to September 2020).
Ms. R. Taylor has served as Executive Vice President and General Counsel since March 2015. She joined
Dollar General as an Employment Attorney in March 2000 and was subsequently promoted to Senior Employment
Attorney in 2001, Deputy General Counsel in 2004, Vice President and Assistant General Counsel in March 2010,
and Senior Vice President and General Counsel in June 2013. Prior to joining Dollar General, she practiced law
with Ogletree, Deakins, Nash, Smoak & Stewart, P.C., where her practice was focused on labor law and
employment litigation. She has also held attorney positions with Ford & Harrison LLP.
Mr. Wenkoff has served as Executive Vice President and Chief Information Officer since July 2017. He
previously served as the Chief Information Officer (May 2012 to June 2017) and Chief Digital Officer (June 2016 to
June 2017) of Franchise World Headquarters, LLC (“Subway”), a restaurant chain, where he was responsible for
global technology and digital strategy, execution and operations for the Subway brand and all of its restaurants. He
owned a Subway franchise from July 2015 until October 2017. He also previously served as Chairman of the Board
and Co-President of Retail Gift Card Association (February 2008 to May 2012); Deputy Chief Information Officer
for Independent Purchase Cooperative, Inc. (May 2005 to May 2012) and President of its subsidiary, Value Pay
22
2020 Form 10-K
Services LLC (May 2005 to February 2011); founder and President of Stored Value Management, Inc. (January
2004 to May 2005); and Vice President, Operations and Finance, and General Counsel of Ontain Corporation
(January 2000 to December 2004). Mr. Wenkoff began his career in 1993 as an articled student, and then attorney
with Douglas Symes & Brissenden and served in various legal positions, including General Counsel, with Pivotal
Corporation from 1997 to 2000.
Ms. Elliott has served as Senior Vice President and Chief Accounting Officer since December 2015. She
joined Dollar General as Senior Vice President and Controller in August 2005. Prior to joining Dollar General, she
served as Vice President and Controller of Big Lots, Inc. from May 2001 to August 2005, where she was responsible
for accounting operations, financial reporting and internal audit. Prior to serving at Big Lots, she served as Vice
President and Controller for Jitney-Jungle Stores of America, Inc. from April 1998 to March 2001, where she was
responsible for the accounting operations and the internal and external financial reporting functions. Prior to serving
at Jitney-Jungle, she practiced public accounting for 12 years, 6 of which were with Ernst & Young LLP.
2020 Form 10-K
23
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is traded on the New York Stock Exchange under the symbol “DG.” On March 12,
2021, there were approximately 2,757 shareholders of record of our common stock.
Dividends
We have paid quarterly cash dividends since 2015. Our Board of Directors most recently increased the
amount of the quarterly cash dividend from $0.36 to $0.42 beginning with the dividend payable on April 20, 2021.
While our Board of Directors currently expects to continue regular quarterly cash dividends, the declaration and
amount of future cash dividends are subject to the Board’s sole discretion and will depend upon, among other things,
our results of operations, cash requirements, financial condition, contractual restrictions and other factors that the
Board may deem relevant in its sole discretion.
Issuer Purchases of Equity Securities
The following table contains information regarding purchases of our common stock made during the
quarter ended January 29, 2021 by or on behalf of Dollar General or any “affiliated purchaser,” as defined by
Rule 10b-18(a)(3) of the Securities Exchange Act of 1934:
Total Number
Average
Total Number
Approximate
Dollar Value
of Shares that May
as Part of Publicly Yet Be Purchased
of Shares
Purchased
Period
10/31/20-11/30/20 . . . . . . . . . . . . . . . . . . . . . . . . . . .
12/01/20-12/31/20 . . . . . . . . . . . . . . . . . . . . . . . . . . .
01/01/21-01/29/21 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
per Share
—
— $
2,527,911 $ 210.44
1,725,845 $ 213.17
4,253,756 $ 211.55
— $ 1,579,203,000
2,527,911 $ 1,047,218,000
679,314,000
1,725,845 $
679,314,000
4,253,756 $
of Shares
Purchased
Price Paid Announced Plans
or Programs(a)
Under the Plans
or Programs(a)
(a) On September 5, 2012, the Company announced a program permitting the Company to repurchase a portion of
its outstanding shares not to exceed a dollar maximum established by the Company’s Board of Directors. The
program was most recently amended on March 17, 2021 to increase the repurchase authorization by $2.0
billion, bringing the cumulative total value of authorized share repurchases under the program since its
inception to $12.0 billion ($2.38 billion of which was available for repurchase as of March 17, 2021 following
the increase in the authorization). Under the authorization, repurchases may be made from time to time in open
market transactions, including pursuant to trading plans adopted in accordance with Rule 10b5-1 of the
Exchange Act, or in privately negotiated transactions. The timing, manner and number of shares repurchased
will depend on a variety of factors, including price, market conditions, compliance with the covenants and
restrictions under the Company’s debt agreements and other factors. This repurchase authorization has no
expiration date.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial and operating information of Dollar General
Corporation as of the dates and for the periods indicated. The selected historical statement of income data and
statement of cash flows data for the fiscal years ended January 29, 2021, January 31, 2020, and February 1, 2019,
and balance sheet data as of January 29, 2021 and January 31, 2020, have been derived from our historical audited
consolidated financial statements included elsewhere in this report. The selected historical statement of income data
and statement of cash flows data for the fiscal years ended February 2, 2018 and February 3, 2017 and balance sheet
24
2020 Form 10-K
data as of February 1, 2019, February 2, 2018, and February 3, 2017 presented in this table have been derived from
audited consolidated financial statements not included in this report.
The information set forth below should be read in conjunction with, and is qualified by reference to, the
Consolidated Financial Statements and related notes included in Part II, Item 8 of this report and the Management’s
Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of this report.
Certain financial disclosures relating to prior periods have been reclassified to conform to the current year
presentation.
(Amounts in millions, excluding per share data,
number of stores, selling square feet, and net sales
per square foot)
Statement of Income Data:
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33,746.8
Cost of goods sold . . . . . . . . . . . . . . . . . . .
23,028.0
Gross profit . . . . . . . . . . . . . . . . . . . . . . . .
10,718.9
Selling, general and administrative
January 29,
2021
7,164.1
expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Operating profit . . . . . . . . . . . . . . . . . . . . .
3,554.8
150.4
Interest expense . . . . . . . . . . . . . . . . . . . . .
—
Other (income) expense . . . . . . . . . . . . . .
3,404.4
Income before income taxes . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . .
749.3
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,655.1
10.70
Earnings per share—basic . . . . . . . . . . . . . $
10.62
Earnings per share—diluted . . . . . . . . . . .
1.44
Dividends per share . . . . . . . . . . . . . . . . . .
Statement of Cash Flows Data:
Net cash provided by (used in):
Operating activities . . . . . . . . . . . . . . . . $ 3,876.2
Investing activities . . . . . . . . . . . . . . . .
(1,024.9)
Financing activities . . . . . . . . . . . . . . . .
(1,715.0)
Total capital expenditures . . . . . . . . . . . . .
(1,028.0)
Other Financial and Operating Data:
Same store sales growth(2) . . . . . . . . . . . .
Same store sales(2) . . . . . . . . . . . . . . . . . . $ 31,905.3
Number of stores included in same store
January 31,
2020
Year Ended
February 1,
2019
February 2,
2018
February 3,
2017(1)
$ 27,754.0
19,264.9
8,489.1
$ 25,625.0
17,821.2
7,803.9
$ 23,471.0
16,249.6
7,221.4
$ 21,986.6
15,204.0
6,782.6
6,186.8
2,302.3
100.6
—
2,201.7
489.2
$ 1,712.6
6.68
$
6.64
1.28
5,687.6
2,116.3
99.9
1.0
2,015.4
425.9
$ 1,589.5
5.99
$
5.97
1.16
5,213.5
2,007.8
97.0
3.5
1,907.3
368.3
$ 1,539.0
5.64
$
5.63
1.04
4,719.2
2,063.4
97.8
—
1,965.6
714.5
$ 1,251.1
4.45
$
4.43
1.00
$ 2,238.0
(782.5)
(1,450.7)
(784.8)
$ 2,143.6
(731.6)
(1,443.9)
(734.4)
$ 1,802.1
(645.0)
(1,077.6)
(646.5)
$ 1,605.0
(550.9)
(1,024.1)
(560.3)
16.3 %
3.9 %
3.2 %
2.7 %
0.9 %
$ 26,374.0
$ 23,854.0
$ 21,871.6
$ 20,348.1
sales calculation . . . . . . . . . . . . . . . . . . .
Number of stores (at period end) . . . . . . .
Selling square feet (in thousands at
16,050
17,177
15,209
16,278
14,283
15,370
13,150
14,534
12,383
13,320
period end) . . . . . . . . . . . . . . . . . . . . . . .
Net sales per square foot(3) . . . . . . . . . . . $
Consumables sales . . . . . . . . . . . . . . . . . . .
Seasonal sales . . . . . . . . . . . . . . . . . . . . . . .
Home products sales . . . . . . . . . . . . . . . . .
Apparel sales . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheet Data (at period end):
Cash and cash equivalents and short-term
107,821
113,755
120,342
127,056
227
231
237
273
$
$
$
$
76.9 %
77.5 %
78.0 %
76.8 %
12.1 %
11.9 %
11.7 %
12.1 %
6.0 %
5.9 %
5.8 %
6.5 %
5.0 %
4.7 %
4.5 %
4.6 %
98,943
229
76.4 %
12.2 %
6.2 %
5.2 %
investments . . . . . . . . . . . . . . . . . . . . . . . $ 1,376.6
25,862.6
4,131.0
6,661.2
Total assets(4) . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . .
$
240.3
22,825.1
2,912.0
6,702.5
$
235.5
13,204.0
2,864.7
6,417.4
$
267.4
12,516.9
3,006.0
6,125.8
$
187.9
11,672.3
3,211.5
5,406.3
(1) The fiscal year ended February 3, 2017 was comprised of 53 weeks.
2020 Form 10-K
25
(2) Same-store sales are calculated based upon stores that were open at least 13 full fiscal months and remain open
at the end of the reporting period. We include stores that have been remodeled, expanded or relocated in our
same-store sales calculation. Changes in same-store sales are calculated based on the comparable 52 calendar
weeks in the current and prior years.
(3) Net sales per square foot was calculated based on total sales for the preceding 12 months as of the ending date
of the reporting period divided by the average selling square footage during the period, including the end of the
fiscal year, the beginning of the fiscal year, and the end of each of our three interim fiscal quarters.
(4) The increase in total assets at January 31, 2020 reflects the effects of adoption of lease accounting guidance.
26
2020 Form 10-K
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This discussion and analysis should be read with, and is qualified in its entirety by, the Consolidated
Financial Statements and the notes thereto. It also should be read in conjunction with the Cautionary Disclosure
Regarding Forward-Looking Statements and the Risk Factors disclosures set forth in the Introduction and in
Item 1A of this report, respectively.
Impact of COVID-19
The COVID-19 (coronavirus) pandemic has resulted in widespread and continuing impacts on the global
economy and has affected our business, as well as our customers, suppliers, and other business partners. We have
been classified as an essential business in all locations where we operate, and as such, our stores have generally
remained open to serve our customers. In responding to the pandemic and its effects, our priority has been the health
and safety of our employees and customers. In order to serve our employees and customers during this time while
prioritizing their well-being, we have taken a variety of actions across our stores, distribution centers and store
support center, including (as applicable): enhancing cleaning protocols, designating one hour each day for our
elderly customers to shop our stores with limited crowds, implementing social distancing measures, providing
personal protective equipment (e.g., gloves, masks and hand sanitizer) for employees, providing employee
temperature checks at our distribution facilities, installing plexiglass barriers at registers, providing paid time off for
those who received a COVID-19 diagnosis, or who were required to care for an immediate family or household
member who received a COVID-19 diagnosis, and providing a one-time payment for hourly frontline employees
who receive a complete COVID-19 vaccination.
In early March 2020, we began seeing heightened demand from customers, particularly for consumable
products such as paper, food and cleaning products, which continued throughout 2020, although with some
variability as to the volume and product mix. Beginning in April, we also saw a significant increase in demand in
many non-consumable products, including home, seasonal and apparel, resulting in an overall significant mix shift
into non-consumable categories in the remainder of 2020. Also beginning in early March 2020, many new
customers began shopping with us for their everyday essential needs, and we are working to retain them going
forward. We have also seen a shift in customer behavior toward trip consolidation, as customers shopped our stores
less frequently than in the same period in 2019, but purchased a larger average basket amount. We have seen a
continuation of these general trends toward trip consolidation and larger basket size. To address the increased
demand, we increased our hiring of new store associates in March and April of 2020, and have worked and continue
to work with suppliers to incorporate new items in stores to meet the essential needs of customers while addressing
certain product shortages and vendor allocation limitations, some of which we expect to persist through at least the
first half of 2021. We believe that this increased customer demand significantly benefited our results of operations,
and in particular, sales, gross profit, operating income and net income for fiscal 2020. Although we incurred
additional payroll related expenses throughout fiscal 2020, including employee appreciation bonuses of
approximately $167 million, increased distribution and transportation costs, and other costs to meet the significant
customer demand and to protect the health and safety of our employees and customers, these costs were more than
offset by the incremental sales. The overall net impact of the pandemic to operating income and net income in 2021
may be less favorable due to the moderating positive impact to our net sales and our anticipation that some of these
incremental costs, particularly those related to health and safety measures, will continue into 2021.
We expect to continue to be affected, although the extent and duration is unknown, by the COVID-19
pandemic and its effects on the economy in a variety of ways, potentially including changing consumer demand
(whether higher or lower) in certain product categories, supply chain interruptions, increased distribution and
transportation costs, increased payroll expenses, and increased costs in an effort to maintain safe work and shopping
environments. Additionally, the vast shutdown of, and/or significant operating limitations imposed upon, many
businesses in the United States has resulted in high levels of unemployment, which, along with current and potential
school closures and operating limitations, could have a significant adverse impact on our core customers for an
unknown length of time. The potential for additional economic stabilization efforts, including additional government
stimulus payments and enhanced unemployment benefits and other government assistance and the effects thereof,
are uncertain. In addition to the items described above, we expect the current adverse global economic conditions
2020 Form 10-K
27
caused by the COVID-19 pandemic to continue in at least the near term, potentially resulting in continued elevated
unemployment, reduced economic activity, and capital markets volatility. We may experience adverse effects on our
business, results of operations and cash flows from a recessionary economic environment that may persist after the
COVID-19 pandemic has moderated. As a result, the quarterly cadence of our results of operations, which varied
from historical patterns in fiscal 2020, may continue to do so in fiscal 2021.
Due to the significant uncertainty surrounding the COVID-19 pandemic and its effects, there may be
consequences that we do not anticipate at this time or that develop in unexpected ways. We will continue to monitor
the evolving situation, and we will continue to take actions as necessary to serve our employees, customers,
communities and shareholders.
Executive Overview
We are the largest discount retailer in the United States by number of stores, with 17,266 stores located in
46 states as of February 26, 2021, with the greatest concentration of stores in the southern, southwestern,
midwestern and eastern United States. We offer a broad selection of merchandise, including consumable products
such as food, paper and cleaning products, health and beauty products and pet supplies, and non-consumable
products such as seasonal merchandise, home decor and domestics, and basic apparel. Our merchandise includes
national brands from leading manufacturers, as well as our own private brand selections with prices at substantial
discounts to national brands. We offer our customers these national brand and private brand products at everyday
low prices (typically $10 or less) in our convenient small-box locations.
We believe our convenient store formats, locations, and broad selection of high-quality products at
compelling values have driven our substantial growth and financial success over the years and through a variety of
economic cycles. We are mindful that the majority of our customers are value-conscious, and many have low and/or
fixed incomes. As a result, we are intensely focused on helping our customers make the most of their spending
dollars. Our core customers are often among the first to be affected by negative or uncertain economic conditions
and among the last to feel the effects of improving economic conditions, particularly when trends are inconsistent
and of an uncertain duration. The primary macroeconomic factors that affect our core customers include the
unemployment and underemployment rates, wage growth, changes in U.S. and global trade policy (including price
increases resulting from the imposition of tariffs), and changes to certain government assistance programs, such as
the Supplemental Nutrition Assistance Program. In 2020, our customers experienced impacts to many of these
factors, as detailed above under “Impact of COVID-19”. Additionally, our customers are impacted by increases in
those expenses that generally comprise a large portion of their household budgets, such as rent, healthcare and fuel
prices. Finally, significant unseasonable or unusual weather patterns can impact customer shopping behaviors.
We remain committed to our long-term operating priorities as we consistently strive to improve our
performance while retaining our customer-centric focus. These priorities include: 1) driving profitable sales growth,
2) capturing growth opportunities, 3) enhancing our position as a low-cost operator, and 4) investing in our diverse
teams through development, empowerment and inclusion.
We seek to drive profitable sales growth through initiatives aimed at increasing customer traffic and
average transaction amount. As we work to provide everyday low prices and meet our customers’ affordability
needs, we remain focused on enhancing our margins through effective category management, inventory shrink
reduction initiatives, private brands penetration, distribution and transportation efficiencies, global sourcing, and
pricing and markdown optimization. Several of our strategic and other sales-driving initiatives are also designed to
capture growth opportunities and are discussed in more detail below.
Historically, our sales in our consumables category, which tend to have lower gross margins, have been the
key drivers of net sales and customer traffic, while sales in our non-consumables categories, which tend to have
higher gross margins, have contributed to more profitable sales growth and an increase in average transaction
amount. Prior to 2020, our sales mix had continued to shift toward consumables, and, within consumables, toward
lower margin departments such as perishables. Although this trend did not occur in 2020 (as discussed above under
“Impact of COVID-19”), we continue to expect some sales mix challenges to persist, and we expect the trend
toward consumables will resume in 2021 and beyond. Several of our initiatives, including certain of those discussed
28
2020 Form 10-K
below, are intended to address these mix challenges; however, there can be no assurances that these efforts will be
successful.
We continue to make progress on and invest in certain strategic initiatives that we believe will help drive
profitable sales growth, both with new and existing customers, and capture long-term growth opportunities. Such
opportunities include leveraging existing and developing new digital tools and technology to provide our customers
with additional shopping access points and even greater convenience. This technology includes our Dollar General
app, which contains a variety of tools to enhance the in-store shopping experience. Additionally, DG Pickup, which
is a buy online, pickup in-store initiative aimed at offering another convenient access point for customers, is now
available in more than 17,000 stores across the chain.
Our non-consumables initiative, or “NCI,” offers a new, differentiated and limited assortment that will
change throughout the year. NCI is continuing to evolve and help shape our approach to non-consumables categories
throughout the chain and is contributing to improved overall sales and gross margin performance in the stores where
it is offered. As we extend this initiative more broadly, as well as incorporate certain related merchandising efforts
throughout our chain, our goal is to provide our customers with a broader, even more relevant non-consumables
merchandise assortment, while continuing to deliver exceptional value within key areas of our non-consumables
categories. Additionally, as we expand this offering, we plan to incorporate the full NCI set in certain stores as well
as an “NCI Lite” version in others so as to reach a greater number of stores and customers more quickly. The NCI
Lite version incorporates the majority of the NCI assortment, but without the footprint and display changes in the
store. We plan to significantly expand the number of stores with either the full NCI or NCI Lite version in 2021,
with a goal of more than 11,000 stores by the end of fiscal 2021.
Additionally, we recently introduced pOpshelf, a unique retail concept that incorporates certain of the
lessons learned from NCI in a differentiated format that is focused on categories such as seasonal and home décor,
health and beauty, home cleaning supplies, and party and entertainment goods. Our goal is to operate up to 50
pOpshelf locations by the end of fiscal 2021.
We are continuing our rollout of the “DG Fresh” initiative, a self-distribution model for frozen and
refrigerated products that is designed to reduce product costs, enhance item assortment, improve our in-stock
position, and enhance sales. By the end of fiscal 2021, we plan to complete our initial rollout of DG Fresh
distribution facilities, which will serve all stores across the chain. DG Fresh contributed to our strong sales
performance in 2020, driven by higher in-stock levels and the introduction of new products in select stores. In
addition, DG Fresh benefitted gross profit in 2020 through improved initial markups on inventory purchases, which
were partially offset by increased distribution and transportation costs. We expect this net benefit to continue in
2021 as we proceed with the rollout.
Tariffs on products from China, as applied to both our direct imports and domestic purchases, did not have
a net material impact on our financial results in 2020, and we do not expect a net material impact in 2021. As noted
above, changes in trade policy that result in higher prices for our customers may negatively impact their budgets,
and consequently, their spending, and additional increases in tariff rates or expansion of products subject to tariffs
may have a more significant impact on our future business.
To support our other operating priorities, we remain focused on capturing growth opportunities. In 2020,
we opened 1,000 new stores, remodeled 1,670 stores, and relocated 110 stores. The COVID-19 pandemic has not
materially delayed our real estate plans, and, based on information currently known to management, we do not
expect any significant delays in 2021. For 2021, we plan to open approximately 1,050 new stores (including any
pOpshelf stores), remodel approximately 1,750 stores, and relocate approximately 100 stores, for a total of 2,900
real estate projects.
We continue to innovate within our channel and are able to utilize the most productive of our various
Dollar General store formats based on the specific market opportunity. We expect that our traditional 7,300 square
foot store format will continue to be the primary store layout for new stores in 2021. We expect approximately 75%
of our planned remodels in 2021 to feature our higher-cooler-count store format that enables us to offer an increased
selection of perishable items. In addition, the majority of these and other real estate projects in 2021 will also
2020 Form 10-K
29
incorporate high-capacity coolers. Our smaller format store (less than 6,000 square feet) is expected to allow us to
capture growth opportunities in urban areas. We have also recently introduced two new larger format stores (one at
approximately 8,500 square feet and the other at approximately 9,500 square feet), which allows us to further
expand our offering and our ability to serve our customers. Beginning later in 2021, we expect the 8,500 square-foot
concept, along with our existing Dollar General Plus format of a similar size, to become our base prototypes for
nearly all new stores moving forward, replacing our traditional 7,300 square foot store format and higher-cooler
count Dollar General Traditional Plus format. The innovation in store formats is expected to allow us to capture
additional growth opportunities within our existing markets. We continue to incorporate lessons learned from our
various store formats and layouts into our existing store base. These lessons contribute to innovation in developing
new formats, with a goal of driving increased customer traffic, average transaction amount, same-store sales and
overall store productivity.
We have established a position as a low-cost operator, always seeking ways to reduce or control costs that
do not affect our customers’ shopping experiences. We plan to continue enhancing this position over time while
employing ongoing cost discipline to reduce certain expenses as a percentage of sales. Nonetheless, we seek to
maintain flexibility to invest in the business as necessary to enhance our long-term competitiveness and profitability.
We have experienced incremental costs related to the COVID-19 pandemic as discussed above under “Impact of
COVID-19” and below under “Results of Operations,” some of which are expected to continue in 2021.
We also have launched “Fast Track”, an initiative aimed at further enhancing our convenience proposition
and in-stock position as well as increasing labor efficiencies within our stores. The first phase of Fast Track involved
sorting process optimization within our distribution centers, as well as increased shelf-ready packaging, to allow for
greater store-level stocking efficiencies, followed by the second-phase pilot of a self-checkout option in a limited
number of stores. We completed the sorting process optimization at all of our non-refrigerated distribution centers in
2019. Additionally, we expect to continue to add self-checkout capabilities in additional stores throughout 2021.
These and the other strategic initiatives discussed above will require us to incur upfront expenses for which there
may not be an immediate return in terms of sales or enhanced profitability.
Certain of our operating expenses, such as wage rates and occupancy costs, have continued to increase in
recent years, due primarily to market forces, including increases in minimum wage rates. While we expect these
increases to persist, certain of our initiatives and plans are intended to help offset these challenges, although there
can be no assurance we will be successful in mitigating them. In addition, federal, state and/or local minimum wage
increases could have a material negative impact on our operating expenses, although the magnitude and timing of
such impact, and our ability to mitigate (whether in whole or in part), depends on the scale and timing of the
mandated increases, among other factors. We have also experienced incremental payroll, distribution and
transportation costs related to the COVID-19 pandemic as discussed above under “Impact of COVID-19”.
Our diverse teams are a competitive advantage, and we proactively seek ways to continue investing in their
development. Our goal is to create an environment that attracts, develops, and retains talented personnel, particularly
at the store manager level, because employees who are promoted from within our company generally have longer
tenures and are greater contributors to improvements in our financial performance. We believe our investments in
compensation and training for our store managers have contributed to improved customer experience scores, higher
sales and improved turnover metrics.
To further enhance shareholder returns, we repurchased shares of our common stock and paid quarterly
cash dividends throughout 2020. In 2021, we expect to continue our share repurchase activity and to pay quarterly
cash dividends, subject to Board discretion and approval.
We utilize key performance indicators (“KPIs”) in the management of our business. Our KPIs include
same-store sales, average sales per square foot, and inventory turnover. Same-store sales are calculated based upon
stores that were open at least 13 full fiscal months and remain open at the end of the reporting period. We include
stores that have been remodeled, expanded or relocated in our same-store sales calculation. Changes in same-store
sales are calculated based on the comparable 52 calendar weeks in the current and prior years. Net sales per square
foot is calculated based on total sales for the preceding 12 months as of the ending date of the reporting period
divided by the average selling square footage during the period, including the end of the fiscal year, the beginning of
30
2020 Form 10-K
the fiscal year, and the end of each of our three interim fiscal quarters. Inventory turnover is calculated based on
total cost of goods sold for the preceding four quarters divided by the average inventory balance as of the ending
date of the reporting period, including the end of the fiscal year, the beginning of the fiscal year, and the end of each
of our three interim fiscal quarters. Each of these measures is commonly used by investors in retail companies to
measure the health of the business. We use these measures to maximize profitability and for decisions about the
allocation of resources.
A continued focus on our four operating priorities as discussed above, coupled with pandemic-related sales
and other impacts (additional discussion below) and strong cash flow management resulted in strong overall
operating and financial performance in 2020 as compared to 2019, as set forth below. Basis points, as referred to
below, are equal to 0.01% as a percentage of net sales.
•
•
•
•
•
•
•
•
•
•
Net sales in 2020 increased 21.6% over 2019. Sales in same-stores increased 16.3%, primarily due
to increases in average transaction amount. Average sales per square foot in 2020 were $273.
Our gross profit rate increased by 117 basis points due primarily to lower markdowns as a
percentage of sales and higher initial markups on inventory purchases.
SG&A as a percentage of sales decreased by 106 basis points primarily due to our significant
increase in 2020 sales, partially offset by incremental costs related to COVID-19.
Operating profit increased 54.4% to $3.55 billion in 2020 compared to $2.30 billion in 2019.
Interest expense increased by $49.8 million in 2020 primarily due to higher average outstanding
debt balances in connection with the issuance of debt in the first quarter of 2020.
The decrease in the effective income tax rate to 22.0% in 2020 from 22.2% in 2019 was due
primarily to income tax benefits associated with share-based compensation.
We reported net income of $2.66 billion, or $10.62 per diluted share, for 2020 compared to net
income of $1.71 billion, or $6.64 per diluted share, for 2019.
We generated approximately $3.88 billion of cash flows from operating activities in 2020, an
increase of 73.2% compared to 2019.
Inventory turnover was 4.9 times, and inventories increased 6.3% on a per store basis compared to
2019.
We repurchased approximately 12.3 million shares of our outstanding common stock for $2.5
billion.
Readers should refer to the detailed discussion of our operating results below for additional comments on
financial performance in the current year as compared with the prior years presented.
Results of Operations
Accounting Periods. The following text contains references to years 2020, 2019, and 2018, which represent
fiscal years ended January 29, 2021, January 31, 2020, and February 1, 2019, respectively. Our fiscal year ends on
the Friday closest to January 31. Fiscal years 2020, 2019 and 2018 were each 52-week accounting periods.
Seasonality. The nature of our business is somewhat seasonal. Primarily because of sales of Christmas-
related merchandise, operating profit in our fourth quarter (November, December and January) has historically been
higher than operating profit achieved in each of the first three quarters of the fiscal year. Expenses, and to a greater
extent operating profit, vary by quarter. Results of a period shorter than a full year may not be indicative of results
expected for the entire year. Furthermore, the seasonal nature of our business may affect comparisons between
2020 Form 10-K
31
periods. Consumer behavior driven by the COVID-19 pandemic has resulted in a departure from seasonal norms we
have experienced in recent years and may continue to disrupt the historical quarterly cadence of our results of
operations for an unknown period of time.
The following table contains results of operations data for fiscal years 2020, 2019 and 2018, and the dollar
and percentage variances among those years.
2020
4,083.7
(amounts in millions, except
per share amounts)
Net sales by category:
Consumables . . . . . . . . . . . . . . . . . . . . . $ 25,906.7
% of net sales . . . . . . . . . . . . . . . . . . . . .
Seasonal . . . . . . . . . . . . . . . . . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Home products . . . . . . . . . . . . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Apparel . . . . . . . . . . . . . . . . . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . $ 33,746.8
Cost of goods sold . . . . . . . . . . . . . . . . . 23,028.0
% of net sales . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . 10,718.9
% of net sales . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative
2,210.0
1,546.6
76.77 %
12.10 %
6.55 %
4.58 %
68.24 %
31.76 %
21.23 %
3,554.8
7,164.1
expenses . . . . . . . . . . . . . . . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Operating profit . . . . . . . . . . . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Other (income) expense . . . . . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . .
% of net sales . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 2,655.1
% of net sales . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . $
3,404.4
10.62
10.53 %
150.4
0.45 %
—
0.00 %
10.09 %
749.3
2.22 %
7.87 %
$
2020 vs. 2019
Amount %
2019 vs. 2018
Amount %
2019
2018
Change Change
Change
Change
$ 21,635.9
$ 19,865.1
$ 4,270.8
19.7 % $ 1,770.8
8.9 %
77.96 %
77.52 %
3,258.9
3,050.3
824.8
25.3
208.6
6.8
11.74 %
11.90 %
1,611.9
1,506.1
598.1
37.1
105.8
7.0
5.81 %
5.88 %
1,247.3
1,203.6
299.2
24.0
43.7
3.6
4.49 %
4.70 %
$ 27,754.0
19,264.9
$ 25,625.0
17,821.2
$ 5,992.9
3,763.1
21.6 % $ 2,128.9
1,443.7
19.5
8.3 %
8.1
69.41 %
69.55 %
8,489.1
7,803.9
2,229.8
26.3
685.2
8.8
30.59 %
30.45 %
6,186.8
5,687.6
977.3
15.8
499.2
8.8
22.29 %
22.20 %
2,302.3
2,116.3
1,252.5
54.4
186.0
8.8
8.30 %
100.6
0.36 %
—
0.00 %
8.26 %
99.9
0.39 %
1.0
0.00 %
49.8
49.5
0.7
0.7
—
—
(1.0)
—
2,201.7
2,015.4
1,202.7
54.6
186.3
9.2
7.93 %
489.2
1.76 %
7.87 %
425.9
1.66 %
260.2
53.2
63.2
14.8
$ 1,712.6
$ 1,589.5
$ 942.5
55.0 % $ 123.1
7.7 %
6.17 %
$
6.64
6.20 %
$
5.97
3.98
59.9 % $
0.67
11.2 %
Net Sales. The net sales increase in 2020 reflects a same-store sales increase of 16.3% compared to 2019. In
2020, our 16,050 same-stores accounted for sales of $31.9 billion. The increase in same-store sales reflects an
increase in average transaction amount driven by a significant increase in items per transaction and, to a lesser
degree, higher average item retail prices, which were offset in part by a decline in customer traffic. Same-store sales
increased in each of the consumables, seasonal, home products and apparel categories, with the largest percentage
increase in the home products category. The 2020 net sales increase was positively affected by new stores, modestly
offset by sales from closed stores.
The net sales increase in 2019 reflects a same-store sales increase of 3.9% compared to 2018. In 2019, our
15,209 same-stores accounted for sales of $26.4 billion. The increase in same-store sales primarily reflects an
increase in average transaction amount and customer traffic compared to 2018. The increase in average transaction
amount was driven by higher average item retail prices. Same-store sales in 2019 increased in each of the
consumables, seasonal and home products and apparel categories, compared to 2018. The 2019 net sales increase
was positively affected by new stores, modestly offset by sales from closed stores.
Gross Profit. In 2020, gross profit increased by 26.3%, and as a percentage of net sales increased by 117
basis points to 31.8% compared to 2019. A reduction in markdowns as a percentage of net sales and higher initial
32
2020 Form 10-K
markups on inventory purchases each contributed to the increase in the gross profit rate. In addition, non-
consumables sales increased at a higher rate than consumables sales in 2020, which contributed to the increase in the
gross profit rate. We also experienced a lower rate of inventory shrink in 2020 compared to 2019. It is uncertain at
this time whether these trends, which differ from our recent historical trends prior to 2020, will continue. These
factors were partially offset by increased distribution and transportation costs which were impacted by increased
volume, some of which is attributable to the COVID-19 pandemic, and discretionary employee bonus expense. As
noted above, we believe the effect of the COVID-19 pandemic on consumer behavior had a significant positive
effect on net sales, and also had a positive effect on our gross profit.
In 2019, gross profit increased by 8.8%, and as a percentage of net sales increased by 14 basis points to
30.6% compared to 2018. Higher initial markups on inventory purchases and a lower LIFO provision contributed to
the increase in the gross profit rate. These factors were partially offset by increased distribution and transportation
costs, a greater proportion of sales of consumables, which generally have a lower gross profit rate than our other
product categories, and sales of lower margin products comprising a higher proportion of consumables sales, as well
as a higher rate of inventory shrinkage.
SG&A. SG&A as a percentage of net sales was 21.2% in 2020 compared to 22.3% in 2019, a decrease of
106 basis points. Although we incurred certain incremental costs discussed above under “Impact of COVID-19,”
including discretionary employee bonus expense, they were more than offset by the significant increase in net sales
during the period as discussed above. Among the expenses that were a lower percentage of net sales in 2020 were
retail labor, store occupancy costs, utilities, and depreciation and amortization. In addition, we recorded expenses of
$31.0 million in 2019 reflecting our estimate for the settlement of significant legal matters. These items were
partially offset by 2020 increases in incentive compensation and hurricane-related expenses.
SG&A as a percentage of sales was 22.3% in 2019 compared to 22.2% in 2018, an increase of 9 basis
points, which included the $31.0 million estimate in 2019 for the settlement of significant legal matters. SG&A in
2019 included a decrease of approximately $22.8 million in hurricane and other disaster-related expenses compared
to 2018 as well as an increase in retail labor costs at a rate less than the increase in net sales.
Interest Expense. Interest expense increased $49.8 million to $150.4 million in 2020 compared to 2019,
primarily due to higher average outstanding debt balances in connection with the issuance of debt in the first quarter
of 2020, and increased $0.7 million to $100.6 million in 2019 compared to 2018. See the detailed discussion under
“Liquidity and Capital Resources” regarding the financing of various long-term obligations.
We had consolidated outstanding variable-rate debt of $3.4 million and $430.1 million as of January 29,
2021 and January 31, 2020, respectively, and the remainder of our outstanding indebtedness as of each of those
dates was fixed rate debt.
Other (income) expense. Other (income) expense in 2018 reflects expenses associated with the voluntary
prepayment of our senior unsecured term loan facility.
Income Taxes. The effective income tax rate for 2020 was 22.0% compared to a rate of 22.2% for 2019
which represents a net decrease of 0.2 percentage points. The effective income tax rate was lower in 2020 primarily
due to increased tax benefits associated with share-based compensation and a larger income tax rate benefit from
state taxes offset by a lower income tax rate benefit from federal income tax credits due primarily to higher pre-tax
earnings in 2020 compared to 2019.
The effective income tax rate for 2019 was 22.2% compared to a rate of 21.1% for 2018 which represents a
net increase of 1.1 percentage points. The effective income tax rate was higher in 2019 primarily due to an increase
in income taxes resulting from changes in state income tax laws and a federal income tax benefit arising from the
Tax Cuts and Jobs Act in 2018 that did not reoccur in 2019.
Off Balance Sheet Arrangements
We are not party to any material off balance sheet arrangements.
2020 Form 10-K
33
Effects of Inflation
In 2020, 2019 and 2018, we experienced increases in product costs due in part to tariffs on certain items
imported from China.
Liquidity and Capital Resources
Current Financial Condition and Recent Developments
During the past three years, we have generated an aggregate of approximately $8.3 billion in cash flows
from operating activities and incurred approximately $2.5 billion in capital expenditures. During that period, we
expanded the number of stores we operate by 2,643, representing growth of approximately 18%, and we remodeled
or relocated 4,069 stores, or approximately 28% of the stores we operated as of the beginning of the three-year
period. In 2021, we intend to continue our current strategy of pursuing store growth, remodels and relocations.
At January 29, 2021, we had a $1.25 billion unsecured revolving credit agreement (the “Revolving
Facility”), $4.0 billion aggregate principal amount of senior notes, and a commercial paper program that may
provide borrowing availability of up to $1.0 billion. At January 29, 2021, we had total consolidated outstanding debt
(including the current portion of long-term obligations) of $4.1 billion, most of which was in the form of senior
notes. All of our material borrowing arrangements are described in greater detail below. Our borrowing availability
under the Revolving Facility may be effectively limited by our commercial paper notes (“CP Notes”) as further
described below. The information contained in Note 5 to the consolidated financial statements contained in Part II,
Item 8 of this report is incorporated herein by reference.
At January 29, 2021, we had a total consolidated cash balance of $1.4 billion. Our balance of cash and cash
equivalents was impacted by our issuance of senior unsecured notes in April 2020 as we sought to strengthen
liquidity as a result of uncertainty created by the COVID-19 pandemic.
We believe our cash flow from operations, and our existing cash balances, combined with availability
under the Revolving Facility, CP Notes and access to the debt markets, will provide sufficient liquidity to fund our
current obligations, projected working capital requirements, capital spending and anticipated dividend payments for
a period that includes the next twelve months as well as the next several years. However, our ability to maintain
sufficient liquidity may be affected by numerous factors, many of which are outside of our control. Depending on
our liquidity levels, conditions in the capital markets and other factors, we may from time to time consider the
issuance of debt, equity or other securities, the proceeds of which could provide additional liquidity for our
operations.
For fiscal 2021, we anticipate potential combined borrowings under the Revolving Facility and CP Notes to
be a maximum of approximately $600 million outstanding at any one time, including any anticipated borrowings to
fund repurchases of common stock.
Revolving Credit Facility
On September 10, 2019, we entered into the Revolving Facility consisting of a $1.25 billion senior
unsecured revolving credit facility of which up to $175.0 million is available for the issuance of letters of credit and
which is scheduled to mature on September 10, 2024.
Borrowings under the Revolving Facility bear interest at a rate equal to an applicable interest rate margin
plus, at our option, either (a) LIBOR or (b) a base rate (which is usually equal to the prime rate). The applicable
interest rate margin for borrowings as of January 29, 2021 was 1.015% for LIBOR borrowings and 0.015% for base-
rate borrowings. We must also pay a facility fee, payable on any used and unused commitment amounts of the
Revolving Facility, and customary fees on letters of credit issued under the Revolving Facility. As of January 29,
2021, the facility fee rate was 0.11%. The applicable interest rate margins for borrowings, the facility fees and the
34
2020 Form 10-K
letter of credit fees under the Revolving Facility are subject to adjustment from time to time based on our long-term
senior unsecured debt ratings.
The Revolving Facility contains a number of customary affirmative and negative covenants that, among
other things, restrict, subject to certain exceptions, our (including our subsidiaries’) ability to: incur additional liens;
sell all or substantially all of our assets; consummate certain fundamental changes or change in our lines of business;
and incur additional subsidiary indebtedness. The Revolving Facility also contains financial covenants that require
the maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio. As of January 29, 2021,
we were in compliance with all such covenants. The Revolving Facility also contains customary events of default.
As of January 29, 2021, under the Revolving Facility, we had no outstanding borrowings, outstanding
letters of credit of $3.5 million, and borrowing availability of $1.25 billion that, due to our intention to maintain
borrowing availability related to the commercial paper program described below, could contribute incremental
liquidity of $1.07 billion at January 29, 2021. In addition, as of January 29, 2021 we had outstanding letters of credit
of $77.7 million which were issued pursuant to separate agreements.
Commercial Paper
As of January 29, 2021, our consolidated balance sheet reflected no outstanding unsecured CP Notes. CP
Notes totaling $181.0 million were held by a wholly-owned subsidiary and therefore are not reflected on the
consolidated balance sheet. We may issue the CP Notes from time to time in an aggregate amount not to exceed $1.0
billion outstanding at any time. The CP Notes may have maturities of up to 364 days from the date of issue and rank
equal in right of payment with all of our other unsecured and unsubordinated indebtedness. We intend to maintain
available commitments under the Revolving Facility in an amount at least equal to the amount of CP Notes
outstanding at any time.
Senior Notes
In April 2013 we issued $900.0 million aggregate principal amount of 3.25% senior notes due 2023 (the
“2023 Senior Notes”) at a discount of $2.4 million, which are scheduled to mature on April 15, 2023. In October
2015 we issued $500.0 million aggregate principal amount of 4.150% senior notes due 2025 (the “2025 Senior
Notes”) at a discount of $0.8 million, which are scheduled to mature on November 1, 2025. In April 2017 we issued
$600.0 million aggregate principal amount of 3.875% senior notes due 2027 (the “2027 Senior Notes”) at a discount
of $0.4 million, which are scheduled to mature on April 15, 2027. In April 2018 we issued $500.0 million aggregate
principal amount of 4.125% senior notes due 2028 (the “2028 Senior Notes”) at a discount of $0.5 million, which
are scheduled to mature on May 1, 2028. In April 2020 we issued $1.0 billion aggregate principal amount of 3.5%
senior notes due 2030 (the “2030 Senior Notes”) at a discount of $0.7 million, which are scheduled to mature on
April 3, 2030, and $500.0 million aggregate principal amount of 4.125% senior notes due 2050 (the “2050 Senior
Notes”) at a discount of $5.0 million, which are scheduled to mature on April 3, 2050. Collectively, the 2023 Senior
Notes, 2025 Senior Notes, 2027 Senior Notes, 2028 Senior Notes, 2030 Senior Notes and 2050 Senior Notes
comprise the “Senior Notes”, each of which were issued pursuant to an indenture as supplemented and amended by
supplemental indentures relating to each series of Senior Notes (as so supplemented and amended, the “Senior
Indenture”). Interest on the 2023 Senior Notes and the 2027 Senior Notes is payable in cash on April 15 and October
15 of each year. Interest on the 2025 and 2028 Senior Notes is payable in cash on May 1 and November 1 of each
year. Interest on the 2030 and 2050 Senior Notes is payable in cash on April 3 and October 3 of each year.
We may redeem some or all of the Senior Notes at any time at redemption prices set forth in the Senior
Indenture. Upon the occurrence of a change of control triggering event, which is defined in the Senior Indenture,
each holder of our Senior Notes has the right to require us to repurchase some or all of such holder’s Senior Notes at
a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to,
but excluding, the repurchase date.
The Senior Indenture contains covenants limiting, among other things, our ability (subject to certain
exceptions) to consolidate, merge, or sell or otherwise dispose of all or substantially all of our assets; and our ability
2020 Form 10-K
35
and the ability of our subsidiaries to incur or guarantee indebtedness secured by liens on any shares of voting stock
of significant subsidiaries.
The Senior Indenture also provides for events of default which, if any of them occurs, would permit or
require the principal of and accrued interest on our Senior Notes to become or to be declared due and payable, as
applicable.
Rating Agencies
Our senior unsecured debt is rated “Baa2,” by Moody’s with a stable outlook and “BBB” by Standard &
Poor’s with a stable outlook, and our commercial paper program is rated “P-2” by Moody’s and “A-2” by Standard
and Poor’s. Our current credit ratings, as well as future rating agency actions, could (i) impact our ability to finance
our operations on satisfactory terms; (ii) affect our financing costs; and (iii) affect our insurance premiums and
collateral requirements necessary for our self-insured programs. There can be no assurance that we will maintain or
improve our current credit ratings.
Contractual Obligations
The following table summarizes our significant contractual obligations and commercial commitments as of
January 29, 2021 (in thousands):
Contractual obligations
Long-term debt obligations . . . . . . . . . . . . $ 4,164,365 $
Interest(a) . . . . . . . . . . . . . . . . . . . . . . . . . .
Self-insurance liabilities(b) . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . .
4,127 $ 913,765 $ 513,722 $ 2,732,751
750,298
16,513
4,936,773
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,206,782 $ 1,687,468 $ 3,958,271 $ 3,124,708 $ 8,436,335
1,431,214
245,086
11,366,117
242,921
30,310
2,337,755
284,119
87,880
2,672,507
153,876
110,383
1,419,082
Total
Payments Due by Period
< 1 year
1 - 3 years
3 - 5 years
5+ years
Commitments Expiring by Period
Commercial commitments(c)
Letters of credit . . . . . . . . . . . . . . . . . . . . . $
Purchase obligations(d) . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . $
< 1 year
Total
47,313 $
741,344
788,657 $ 785,185 $
47,313 $
737,872
1 - 3 years
3 - 5 years
5+ years
— $
3,472
3,472 $
— $
—
— $
—
—
—
Total contractual obligations and commercial
commitments(e) . . . . . . . . . . . . . . . . . . . . . . . . $ 17,995,439 $ 2,472,653 $ 3,961,743 $ 3,124,708 $ 8,436,335
(a) Represents obligations for interest payments on long-term debt and includes projected interest on variable rate
long-term debt using 2020 year end rates and balances. Variable rate long-term debt includes the Revolving
Facility (although such facility had a balance of zero as of January 29, 2021), the CP Notes (which also had a
balance of zero as of January 29, 2021, and which amount is net of $181 million held by a wholly-owned
subsidiary), and the balance of an outstanding tax increment financing of $3.4 million.
(b) We retain a significant portion of the risk for our workers’ compensation, employee health, general liability,
property loss, automobile, and third-party landlord claims exposures. As these obligations do not have
scheduled maturities, these amounts represent undiscounted estimates based upon actuarial assumptions.
Substantially all amounts are reflected on an undiscounted basis in our consolidated balance sheets.
(c) Commercial commitments include information technology license and support agreements, supplies, fixtures,
letters of credit for import merchandise, and other inventory purchase obligations.
(d) Purchase obligations include legally binding agreements for software licenses and support, supplies, fixtures,
and merchandise purchases (excluding such purchases subject to letters of credit).
36
2020 Form 10-K
(e) We have potential payment obligations associated with uncertain tax positions that are not reflected in these
totals. We are currently unable to make reasonably reliable estimates of the period of cash settlement with the
taxing authorities for the $7.5 million of reserves for uncertain tax positions.
Share Repurchase Program
Our common stock repurchase program had a total remaining authorization of approximately $0.68 billion
at January 29, 2021. Effective March 17, 2021, our Board of Directors authorized a $2 billion increase to such
program which resulted in a total remaining authorization of approximately $2.38 billion under the program at such
date. The authorization allows repurchases from time to time in open market transactions, including pursuant to
trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or in
privately negotiated transactions. The timing, manner and number of shares repurchased will depend on a variety of
factors, including price, market conditions, compliance with the covenants and restrictions under our debt
agreements and other factors. The repurchase program has no expiration date and may be modified or terminated
from time to time at the discretion of our Board of Directors. For more detail about our share repurchase program,
see Part II, Item 5 of this report and Note 11 to the consolidated financial statements contained in Part II, Item 8 of
this report.
Other Considerations
On March 16, 2021, the Board of Directors declared a quarterly cash dividend of $0.42 per share which is
payable on or before April 20, 2021 to shareholders of record of our common stock on April 6, 2021. We paid
quarterly cash dividends of $0.36 per share in 2020. Although the Board currently expects to continue regular
quarterly cash dividends, the declaration and amount of future cash dividends are subject to the Board’s sole
discretion and will depend upon, among other factors, our results of operations, cash requirements, financial
condition, contractual restrictions and other factors that our Board may deem relevant in its sole discretion.
Our inventory balance represented approximately 48% of our total assets exclusive of goodwill, operating
lease assets, and other intangible assets as of January 29, 2021. Our ability to effectively manage our inventory
balances can have a significant impact on our cash flows from operations during a given fiscal year. Inventory
purchases are often somewhat seasonal in nature, such as the purchase of warm-weather or Christmas-related
merchandise. Efficient management of our inventory has been and continues to be an area of focus for us.
As described in Note 7 to the consolidated financial statements, we are involved in a number of legal
actions and claims, some of which could potentially result in material cash payments. Adverse developments in
those actions could materially and adversely affect our liquidity.
Cash Flows
Cash flows from operating activities. Cash flows from operating activities were $3.88 billion in 2020,
which represents a $1.64 billion increase compared to 2019. As noted above, the COVID-19 pandemic has resulted
in increased sales, gross profit, and operating income, which contributed to the increase in net income of $942.5
million in 2020 over 2019. Changes in accounts payable resulted in a $745.6 million increase in our working capital
in 2020 compared to a $428.6 million increase in 2019, due primarily to the timing of receipts and payments.
Changes in accrued expenses resulted in a $388.6 million increase in our working capital in 2020 compared to a
$100.3 million increase in 2019, due primarily to increased accruals for compensation and non-income taxes.
Changes in merchandise inventories resulted in a $575.8 million decrease in our working capital in 2020 which was
similar to the decrease of $578.8 million in 2019 as described in greater detail below. Changes in income taxes
including an increase in cash paid for income taxes in 2020 compared to 2019 are primarily due to the increase in
pre-tax earnings in 2020.
Cash flows from operating activities were $2.24 billion in 2019, which represents a $94.4 million increase
compared to 2018. Changes in accounts payable resulted in a $428.6 million increase in 2019 compared to a $375.2
million increase in 2018, due primarily to the timing of receipts and payments which was partially impacted by
certain changes in payment terms. In addition, net income increased by $123.1 million in 2019 over 2018. These
2020 Form 10-K
37
items were offset by changes in merchandise inventories which resulted in a $578.8 million decrease in 2019 as
compared to a decrease of $521.3 million in 2018. Changes in income taxes in 2019 compared to 2018 are primarily
due to the timing of payments for income taxes.
On an ongoing basis, we closely monitor and manage our inventory balances, and they may fluctuate from
period to period based on new store openings, the timing of purchases, and other factors. Merchandise inventories
increased by 12% in 2020, by 14% in 2019 and by 14% in 2018. Inventory levels in the consumables category
increased by $455.6 million, or 15%, in 2020, by $371.9 million, or 14%, in 2019, and by $320.9 million, or 14% in
2018. The seasonal category increased by $35.7 million, or 4%, in 2020, by $127.3 million, or 17%, in 2019, and by
$108.4 million, or 17%, in 2018. The home products category increased by $66.3 million, or 15%, in 2020, by $82.8
million, or 23%, in 2019, and by $24.0 million, or 7%, in 2018. The apparel category increased by $12.9 million, or
3%, in 2020, decreased by $2.1 million, or 1%, in 2019, and increased by $34.7 million, or 10%, in 2018.
Cash flows from investing activities. Significant components of property and equipment purchases in 2020
included the following approximate amounts: $447 million for improvements, upgrades, remodels and relocations of
existing stores; $271 million for distribution and transportation-related capital expenditures; $250 million related to
store facilities, primarily for leasehold improvements, fixtures and equipment in new stores; and $50 million for
information systems upgrades and technology-related projects. The timing of new, remodeled and relocated store
openings along with other factors may affect the relationship between such openings and the related property and
equipment purchases in any given period. During 2020, we opened 1,000 new stores and remodeled or relocated
1,780 stores.
Significant components of property and equipment purchases in 2019 included the following approximate
amounts: $338 million for improvements, upgrades, remodels and relocations of existing stores; $217 million for
distribution and transportation-related projects; $149 million for new leased stores, primarily for leasehold
improvements, fixtures and equipment; and $59 million for information systems upgrades and technology-related
projects. During 2019, we opened 975 new stores and remodeled or relocated 1,124 stores.
Significant components of property and equipment purchases in 2018 included the following approximate
amounts: $289 million for improvements, upgrades, remodels and relocations of existing stores; $242 million for
distribution and transportation-related projects; $138 million for new leased stores, primarily for leasehold
improvements, fixtures and equipment; and $47 million for information systems upgrades and technology-related
projects. During 2018, we opened 900 new stores and remodeled or relocated 1,165 stores.
Capital expenditures during 2021 are projected to be in the range of $1.05 billion to $1.15 billion. We
anticipate funding 2021 capital requirements with a combination of some or all of the following: existing cash
balances, cash flows from operations, availability under our Revolving Facility and/or the issuance of additional
senior notes and CP Notes. We plan to continue to invest in store growth and development of approximately 1,050
new stores and approximately 1,850 stores to be remodeled or relocated. Capital expenditures in 2021 are
anticipated to support our store growth as well as our remodel and relocation initiatives, including capital outlays for
leasehold improvements, fixtures and equipment; the construction of new stores; costs to support and enhance our
supply chain initiatives including new and existing distribution center facilities and our private fleet; technology
initiatives; as well as routine and ongoing capital requirements.
Cash flows from financing activities. In 2020, net proceeds from the issuance of the 2030 Senior Notes and
2050 Senior Notes totaled $1.5 billion, net commercial paper borrowings decreased by $425.2 million, and
borrowings and repayments under the Revolving Facility were $300.0 million each. We repurchased 12.3 million
shares of our common stock at a total cost of $2.5 billion and paid cash dividends of $355.9 million.
In 2019, we had a net increase in consolidated commercial paper borrowings of $58.3 million and had no
borrowings or repayments under the Revolving Facility. We repurchased 8.3 million outstanding shares of our
common stock in 2019 at a total cost of $1.2 billion and paid cash dividends of $327.6 million.
In 2018, we had net proceeds from the issuance of the 2028 Senior Notes of $499.5 million, redeemed the
2018 Senior Notes for $400.0 million, and made a voluntary prepayment of our senior unsecured term loan facility
38
2020 Form 10-K
of $175.0 million. We had a net decrease in consolidated commercial paper borrowings in 2018 of $63.3 million and
had no borrowings or repayments under the Revolving Facility. We repurchased 9.9 million outstanding shares of
our common stock in 2018 at a total cost of $1.0 billion and paid cash dividends of $306.5 million.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with generally accepted accounting principles in the
United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect reported amounts
and related disclosures. In addition to the estimates presented below, there are other items within our financial
statements that require estimation, but are not deemed critical as defined below. We believe these estimates are
reasonable and appropriate. However, if actual experience differs from the assumptions and other considerations
used, the resulting changes could have a material effect on the financial statements taken as a whole.
Management believes the following policies and estimates are critical because they involve significant
judgments, assumptions, and estimates. Management has discussed the development and selection of the critical
accounting estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed
the disclosures presented below relating to those policies and estimates. See Note 1 to the consolidated financial
statements for a detailed discussion of our principal accounting policies.
Merchandise Inventories. Merchandise inventories are stated at the lower of cost or market (“LCM”) with
cost determined using the retail last in, first out (“LIFO”) method. We use the retail inventory method (“RIM”) to
calculate gross profit and the resulting valuation of inventories at cost, which are computed utilizing a calculated
cost-to-retail inventory ratio at an inventory department level. We apply the RIM to these departments, which are
groups of products that are fairly uniform in terms of cost, selling price relationship and turnover. The RIM will
result in valuing inventories at LCM if permanent markdowns are currently taken as a reduction of the retail value of
inventories. Inherent in the RIM calculation are certain management judgments and estimates that may impact the
ending inventory valuation at cost, as well as the gross profit recognized. These judgments include ensuring
departments consist of similar products, recording estimated shrinkage between physical inventories, and timely
recording of markdowns needed to sell inventory.
We perform an annual LIFO analysis whereby all merchandise units are considered for inclusion in the
index formulation. An actual valuation of inventory under the LIFO method is made at the end of each year based on
the inventory levels and costs at that time. In contrast, interim LIFO calculations are based on management’s annual
estimates of sales, the rate of inflation or deflation, and year-end inventory levels. We also perform analyses for
determining obsolete inventory, adjusting inventory on a quarterly basis to an LCM value based on various
management assumptions including estimated below cost markdowns not yet recorded, but required to liquidate
such inventory in future periods.
Factors considered in the determination of markdowns include current and anticipated demand based on
changes in competitors’ practices, consumer preferences, consumer spending, significant weather events and
unseasonable weather patterns. Certain of these factors are outside of our control and may result in greater than
estimated markdowns to entice consumer purchases of excess inventory. The amount and timing of markdowns may
vary significantly from year to year.
We perform physical inventories in virtually all of our stores on an annual basis. Due to the COVID-19
pandemic, we were unable to perform physical inventories in our stores from mid-March through mid-May in 2020,
which prevented us from completing all of our planned store physical inventories in 2020, the effect of which was
immaterial. We calculate our shrink provision based on actual physical inventory results during the fiscal period and
an accrual for estimated shrink occurring subsequent to a physical inventory through the end of the fiscal reporting
period. This accrual is calculated as a percentage of sales at each retail store, at a department level, based on the
store’s most recent historical shrink rate. To the extent that subsequent physical inventories yield different results
than the estimated accrual, our effective shrink rate for a given reporting period will include the impact of adjusting
to the actual results.
2020 Form 10-K
39
We believe our estimates and assumptions related to the application of the RIM results in a merchandise
inventory valuation that reasonably approximates cost on a consistent basis.
Impairment of Long-lived Assets. Impairment of long-lived assets results when the carrying value of the
assets exceeds the estimated undiscounted future cash flows generated by the assets. Our estimate of undiscounted
future store cash flows is based upon historical operations of the stores and estimates of future profitability which
encompasses many factors that are subject to variability and are difficult to predict. If our estimates of future cash
flows are not materially accurate, our impairment analysis could be impacted accordingly. If a long-lived asset is
found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value
and the asset’s estimated fair value. The fair value is estimated based primarily upon projected future cash flows
(discounted at our credit adjusted risk-free rate) or other reasonable estimates of fair market value. Although not
currently anticipated, changes in these estimates, assumptions or projections could materially affect the
determination of fair value or impairment.
Insurance Liabilities. We retain a significant portion of the risk for our workers’ compensation, employee
health, general liability, property loss, automobile and certain third-party landlord claim exposures. These represent
significant costs primarily due to our large employee base and number of stores. Provisions are made for these
liabilities on an undiscounted basis. Certain of these liabilities are based on actual claim data and estimates of
incurred but not reported claims developed using actuarial methodologies based on historical claim trends, which
have been and are anticipated to continue to be materially accurate. If future claim trends deviate from recent
historical patterns, or other unanticipated events affect the number and significance of future claims, we may be
required to record additional expenses or expense reductions, which could be material to our future financial results.
Contingent Liabilities – Income Taxes. Income tax reserves are determined using the methodology
established by accounting standards relating to uncertainty in income taxes. These standards require companies to
assess each income tax position taken using a two-step process. A determination is first made as to whether it is
more likely than not that the position will be sustained, based upon the technical merits, upon examination by the
taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the
tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the
respective tax position. Uncertain tax positions require determinations and liabilities to be estimated based on
provisions of the tax law which may be subject to change or varying interpretation. If our determinations and
estimates prove to be inaccurate, the resulting adjustments could be material to our future financial results.
Lease Accounting. We adopted new accounting guidance related to leases as of February 2, 2019, using the
modified retrospective approach. Lease liabilities are recorded at a discount based upon our estimated collateralized
incremental borrowing rate which involves significant judgments and estimates. Factors incorporated into the
calculation of lease discount rates include the valuations and yields of our senior notes, their credit spread over
comparable U.S. Treasury rates, and an index of the credit spreads for all North American investment grade
companies by rating. To determine an indicative secured rate, we use the estimated credit spread improvement that
would result from an upgrade of one ratings classification by tenor. Many of our stores are subject to build-to-suit
arrangements with landlords, which typically carry a primary lease term of up to 15 years with multiple renewal
options. We also have stores subject to shorter-term leases and many of these leases have renewal options. We
record single lease expense on a straight-line basis over the lease term including any option periods that are
reasonably certain to be renewed, commencing on the date that we take physical possession of the property from the
landlord. Tenant allowances, to the extent received, are recorded as a reduction of the right of use asset.
Improvements of leased properties are amortized over the shorter of the life of the applicable lease term or the
estimated useful life of the asset.
Share-Based Payments. Our stock option awards are valued on an individual grant basis using the Black-
Scholes-Merton closed form option pricing model. We believe that this model fairly estimates the value of our stock
option awards. The application of this valuation model involves assumptions that are judgmental in the valuation of
stock options, which affects compensation expense related to these options. These assumptions include the term that
the options are expected to be outstanding, the historical volatility of our stock price, applicable interest rates and the
dividend yield of our stock. Other factors involving judgments that affect the expensing of share-based payments
include estimated forfeiture rates of share-based awards. Historically, these estimates have been materially accurate;
40
2020 Form 10-K
however, if our estimates differ materially from actual experience, we may be required to record additional expense
or reductions of expense, which could be material to our future financial results.
Fair Value Measurements. Accounting standards for the measurement of fair value of assets and liabilities
establish a fair value hierarchy that distinguishes between market participant assumptions based on market data
obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2
of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable
inputs classified within Level 3 of the hierarchy). Therefore, Level 3 inputs are typically based on an entity’s own
assumptions, as there is little, if any, related market activity, and thus require the use of significant judgment and
estimates. Currently, we have no assets or liabilities that are valued based solely on Level 3 inputs. Our fair value
measurements are primarily associated with our outstanding debt instruments. We use various valuation models in
determining the values of these liabilities. We believe that in recent years these methodologies have produced
materially accurate valuations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Financial Risk Management
We are exposed to market risk primarily from adverse changes in interest rates, and to a lesser degree
commodity prices. To minimize this risk, we may periodically use financial instruments, including derivatives. All
derivative financial instrument transactions must be authorized and executed pursuant to approval by the Board of
Directors. As a matter of policy, we do not buy or sell financial instruments for speculative or trading purposes, and
any such derivative financial instruments are intended to be used to reduce risk by hedging an underlying economic
exposure. Our objective is to correlate derivative financial instruments and the underlying exposure being hedged, so
that fluctuations in the value of the financial instruments are generally offset by reciprocal changes in the value of
the underlying economic exposure.
Interest Rate Risk
We manage our interest rate risk through the strategic use of fixed and variable interest rate debt and, from
time to time, derivative financial instruments. In recent years, our principal interest rate exposure has been from
outstanding borrowings under our Revolving Facility as well as our commercial paper program. As of January 29,
2021, we had no consolidated borrowings under our commercial paper program and no borrowings outstanding
under our Revolving Facility. In order to mitigate a portion of the variable rate interest exposure under the credit
facilities, in prior years we have entered into various interest rate swaps. As of January 29, 2021, no such interest
rate swaps were outstanding and, as a result, we will have exposure to fluctuations in variable interest rates for any
future amounts borrowed under the Revolving Facility and our commercial paper program. For a detailed discussion
of our Revolving Facility and our commercial paper program, see Note 5 to the consolidated financial statements.
At January 29, 2021, our primary interest rate exposure was from changes in interest rates on our variable
rate investment holdings, which were classified as cash and cash equivalents in our consolidated financial
statements. The increase in cash and cash equivalents was driven primarily by our issuance of $1.5 billion of senior
unsecured notes during the first quarter of 2020 as we sought to strengthen liquidity as a result of the continued
uncertainty generated by the COVID-19 pandemic. Based on our variable rate cash investment balance of $1.1
billion at January 29, 2021, the annualized effect of a 0.1 percentage point decrease in interest rates would have
resulted in a pre-tax reduction of our earnings and cash flows of approximately $1.1 million in 2020.
At January 31, 2020, our primary interest rate exposure was from changes in interest rates on our variable
interest rate debt. A change in interest rates on variable rate debt impacts our pre-tax earnings and cash flows;
whereas a change in interest rates on fixed rate debt impacts the economic fair value of debt but not our pre-tax
earnings and cash flows. Based on our variable rate borrowing levels as of January 31, 2020, the annualized effect of
a one percentage point increase in variable interest rates would have resulted in a pretax reduction of our earnings
and cash flows of approximately $4.3 million in 2019.
2020 Form 10-K
41
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
Dollar General Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Dollar General Corporation and subsidiaries (the
Company) as of January 29, 2021 and January 31, 2020, the related consolidated statements of income,
comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended
January 29, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at January 29, 2021 and January 31, 2020, and the results of its operations and its cash flows for each of
the three years in the period ended January 29, 2021, in conformity with U.S. generally accepted accounting
principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of January 29, 2021, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated March 19, 2021, expressed an unqualified opinion
thereon.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is
to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of the critical audit matter does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
42
2020 Form 10-K
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to
which it relates.
Description of the
Matter
Estimate of Workers’ Compensation and General Liability Reserves
The Company records expenses and reserves for workers’ compensation matters related
to alleged work-related employee accidents and injuries, as well as general liability
matters related to alleged non-employee incidents and injuries. At January 29, 2021, the
Company’s reserves for self-insurance risks were $245.1 million, which includes
workers’ compensation and general liability reserves. As discussed in Note 1 of the
consolidated financial statements, the Company retains a significant portion of risk
related to its workers’ compensation and general liability exposures. Accordingly,
provisions are recorded for the Company’s estimates of such losses. The undiscounted
future claim costs for the workers’ compensation and general liability exposures are
estimated using actuarial methods.
Auditing management’s assessment of the recorded self-insurance exposure reserves was
complex and judgmental due to the significant assumptions required in projecting the
exposure on incurred claims (including those which have not been reported to the
Company). In particular, the estimate was sensitive to significant assumptions such as
loss development factors, trend factors, pure loss rates, and projected claim counts.
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating
effectiveness of controls over the Company’s accounting for these self-insurance
exposures. For example, we tested controls over the appropriateness of the assumptions
management used in the calculation and the completeness and accuracy of the data
underlying the reserves.
To test the Company’s determination of the estimated required self-insurance reserves,
we performed audit procedures that included, among others, assessing the actuarial
valuation methodologies utilized by management, testing the significant assumptions
discussed above, testing the completeness and accuracy of the underlying data used by
the Company in its evaluation, and testing the mathematical accuracy of the calculations.
We also compared the significant assumptions used by management to industry accepted
actuarial assumptions, reassessed the accuracy of management’s historical estimates
utilized in prior period evaluations, and utilized an actuarial valuation specialist to assist
in assessing the valuation methodologies and significant assumptions used in the
valuation analysis, as well as to compare the Company’s recorded reserve to an
independently developed range of actuarial reserves.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2001.
Nashville, Tennessee
March 19, 2021
2020 Form 10-K
43
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
January 29,
January 31,
2021
2020
ASSETS
Current assets:
240,320
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,376,577 $
4,676,848
Merchandise inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76,537
Income taxes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
184,163
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,177,868
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,278,359
Net property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,796,183
Operating lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,338,589
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,200,006
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34,079
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,862,624 $ 22,825,084
5,247,477
90,760
199,405
6,914,219
3,899,997
9,473,330
4,338,589
1,199,870
36,619
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,074,079 $
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies
Shareholders’ equity:
3,614,089
1,006,552
16,063
5,710,783
4,130,975
8,385,388
710,549
263,691
964,805
2,860,682
709,156
8,362
4,543,005
2,911,993
7,819,683
675,227
172,676
Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock; $0.875 par value, 1,000,000 shares authorized, 240,785 and
251,936 shares issued and outstanding at January 29, 2021 and January 31,
2020, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
220,444
3,322,531
3,162,660
(3,135)
6,702,500
Total liabilities and shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,862,624 $ 22,825,084
210,687
3,446,612
3,006,102
(2,163)
6,661,238
—
—
The accompanying notes are an integral part of the consolidated financial statements.
44
2020 Form 10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
January 29,
2021
For the Year Ended
January 31,
February 1,
2020
2019
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33,746,839 $ 27,753,973 $ 25,625,043
17,821,173
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,803,870
5,687,564
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . .
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,116,306
99,871
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,019
2,015,416
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
425,944
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,655,050 $ 1,712,555 $ 1,589,472
Earnings per share:
23,027,977
10,718,862
7,164,097
3,554,765
150,385
—
3,404,380
749,330
19,264,912
8,489,061
6,186,757
2,302,304
100,574
—
2,201,730
489,175
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
10.70 $
10.62 $
6.68 $
6.64 $
5.99
5.97
Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
248,171
250,076
256,553
258,053
265,155
266,105
Dividends per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.44 $
1.28 $
1.16
The accompanying notes are an integral part of the consolidated financial statements.
2020 Form 10-K
45
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
For the Year Ended
January 29, January 31, February 1,
2020
2021
2019
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,655,050 $ 1,712,555 $ 1,589,472
Unrealized net gain (loss) on hedged transactions, net of related income
tax expense (benefit) of $346, $345 and $344, respectively . . . . . . . . .
974
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,656,022 $ 1,713,528 $ 1,590,446
972
973
The accompanying notes are an integral part of the consolidated financial statements.
46
2020 Form 10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands except per share amounts)
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balances, February 2, 2018 . . . . . . . . . . . . . . . . . . . . 268,733 $ 235,141 $ 3,196,462 $ 2,698,352 $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid, $1.16 per common share . . . . . . . . . .
Unrealized net gain (loss) on hedged transactions . . . .
Share-based compensation expense . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . .
Transition adjustment upon adoption of accounting
1,589,472
(306,562)
—
—
(998,839)
—
—
—
40,879
—
—
—
—
—
(8,655)
—
—
—
—
(9,891)
(4,181) $ 6,125,774
1,589,472
(306,562)
974
40,879
(1,007,494)
—
—
974
—
—
standard (see Note 1) . . . . . . . . . . . . . . . . . . . . . . .
Other equity and related transactions . . . . . . . . . . . . .
Balances, February 1, 2019 . . . . . . . . . . . . . . . . . . . . 259,511 $ 227,072 $ 3,252,421 $ 2,941,107 $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid, $1.28 per common share . . . . . . . . . .
Unrealized net gain (loss) on hedged transactions . . . .
Share-based compensation expense . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . .
Transition adjustment upon adoption of accounting
1,712,555
(327,578)
—
—
(1,193,155)
—
—
—
48,589
—
—
—
—
—
(7,221)
—
—
—
—
(8,252)
(41,316)
—
—
15,080
—
669
—
586
—
677
standard (see Note 1) . . . . . . . . . . . . . . . . . . . . . . .
Other equity and related transactions . . . . . . . . . . . . .
Balances, January 31, 2020 . . . . . . . . . . . . . . . . . . . . 251,936 $ 220,444 $ 3,322,531 $ 3,162,660 $
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid, $1.44 per common share . . . . . . . . . .
Unrealized net gain (loss) on hedged transactions . . . .
Share-based compensation expense . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . .
Other equity and related transactions . . . . . . . . . . . . .
Balances, January 29, 2021 . . . . . . . . . . . . . . . . . . . . 240,785 $ 210,687 $ 3,446,612 $ 3,006,102 $
2,655,050
(355,934)
—
—
(2,455,674)
—
—
—
—
—
(10,760)
1,003
—
—
—
—
(12,297)
1,146
—
—
—
68,609
—
55,472
28,830
901
—
21,521
—
593
—
—
(41,316)
15,666
(3,207) $ 6,417,393
1,712,555
(327,578)
973
48,589
(1,200,376)
—
—
973
—
—
—
(901)
28,830
22,114
(3,135) $ 6,702,500
2,655,050
(355,934)
972
68,609
(2,466,434)
56,475
(2,163) $ 6,661,238
—
—
972
—
—
—
The accompanying notes are an integral part of the consolidated financial statements.
2020 Form 10-K
47
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
January 29,
For the Year Ended
January 31,
February 1,
2021
2020
2019
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,655,050 $ 1,712,555 $ 1,589,472
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncash share-based compensation . . . . . . . . . . . . . . . . . . . . . . . .
Other noncash (gains) and losses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in operating assets and liabilities:
574,237
34,976
68,609
11,570
504,804
55,407
48,589
8,293
454,134
52,325
40,879
42,870
(575,827)
(16,516)
745,596
388,597
(6,522)
(3,611)
3,876,159
Merchandise inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . .
Cash flows from investing activities:
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of property and equipment . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities . . . . . . . . . . . . . . .
Cash flows from financing activities:
Issuance of long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in commercial paper outstanding . . . . . . . . .
Borrowings under revolving credit facilities . . . . . . . . . . . . . . . . . . . .
Repayments of borrowings under revolving credit facilities . . . . . . .
Costs associated with issuance of debt . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other equity and related transactions . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . .
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . .
Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . $ 1,376,577 $
Supplemental cash flow information:
Cash paid for:
1,494,315
(4,640)
(425,200)
300,000
(300,000)
(13,574)
(2,466,434)
(355,926)
56,467
(1,714,992)
1,136,257
240,320
(1,027,963)
3,053
(1,024,910)
(578,783)
(14,453)
428,627
100,322
(20,404)
(6,959)
2,237,998
(521,342)
(12,097)
375,214
65,857
56,390
(152)
2,143,550
(784,843)
2,358
(782,485)
(734,380)
2,777
(731,603)
—
(1,465)
58,300
—
—
(1,675)
(1,200,376)
(327,568)
22,104
(1,450,680)
4,833
235,487
240,320 $
499,495
(577,321)
(63,300)
—
—
(4,384)
(1,007,494)
(306,523)
15,626
(1,443,901)
(31,954)
267,441
235,487
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
128,211 $
721,570 $
100,033 $
457,119 $
98,012
313,457
Supplemental noncash investing and financing activities:
Right of use assets obtained in exchange for new operating lease
liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,721,530 $ 1,705,988
Purchases of property and equipment awaiting processing for
payment, included in Accounts payable . . . . . . . . . . . . . . . . . . . . . . $
118,059 $
110,248 $
63,662
The accompanying notes are an integral part of the consolidated financial statements.
48
2020 Form 10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
Basis of presentation and accounting policies
Basis of presentation
These notes contain references to the years 2020, 2019, and 2018, which represent fiscal years ended
January 29, 2021, January 31, 2020, and February 1, 2019, respectively. The Company’s 2020, 2019 and 2018
accounting periods were each comprised of 52 weeks. The Company’s fiscal year ends on the Friday closest to
January 31. The consolidated financial statements include all subsidiaries of the Company, except for its not-for-
profit subsidiary which the Company does not control. Intercompany transactions have been eliminated.
The Company sells general merchandise on a retail basis through 17,177 stores (as of January 29, 2021) in
46 states with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United
States. As of January 29, 2021, the Company operated 16 distribution centers for non-refrigerated products, nine
cold storage distribution centers, and one combination distribution center which has both refrigerated and non-
refrigerated products. The Company leases 12 of these facilities and the remainder are owned.
Cash and cash equivalents
Cash and cash equivalents include highly liquid investments with insignificant interest rate risk and original
maturities of three months or less when purchased. Such investments primarily consist of money market funds, bank
deposits, certificates of deposit, and commercial paper. The carrying amounts of these items are a reasonable
estimate of their fair value due to the short maturity of these investments.
Payments due from processors for electronic tender transactions classified as cash and cash equivalents
totaled approximately $125.3 million and $101.9 million at January 29, 2021 and January 31, 2020, respectively.
Investments in debt and equity securities
The Company accounts for investments in debt and marketable equity securities as held-to-maturity,
available-for-sale, or trading, depending on their classification. Debt securities categorized as held-to-maturity are
stated at amortized cost. Debt and equity securities categorized as available-for-sale are stated at fair value, with any
unrealized gains and losses, net of deferred income taxes, reported as a component of Accumulated other
comprehensive loss. Trading securities are stated at fair value, with changes in fair value recorded as a component of
Selling, general and administrative (“SG&A”) expense. The cost of securities sold is based upon the specific
identification method.
Merchandise inventories
Inventories are stated at the lower of cost or market (“LCM”) with cost determined using the retail last-in,
first-out (“LIFO”) method as this method results in a better matching of costs and revenues. Under the Company’s
retail inventory method (“RIM”), the calculation of gross profit and the resulting valuation of inventories at cost are
computed by applying a calculated cost-to-retail inventory ratio to the retail value of sales at a department level. The
use of the RIM will result in valuing inventories at LCM if markdowns are currently taken as a reduction of the
retail value of inventories. Costs directly associated with warehousing and distribution are capitalized into inventory.
The excess of current cost over LIFO cost was approximately $115.9 million and $110.7 million at January
29, 2021 and January 31, 2020, respectively. Current cost is determined using the RIM on a first-in, first-out basis.
Under the LIFO inventory method, the impacts of rising or falling market price changes increase or decrease cost of
sales (the LIFO provision or benefit). The Company recorded a LIFO provision (benefit) of $5.1 million in 2020,
$7.0 million in 2019, and $25.2 million in 2018, which is included in cost of goods sold in the consolidated
statements of income.
2020 Form 10-K
49
The Company purchases its merchandise from a wide variety of suppliers. The Company’s three largest
suppliers accounted for approximately 9%, 8%, and 8%, respectively, of the Company’s purchases in 2020.
Vendor rebates
The Company accounts for all cash consideration received from vendors in accordance with applicable
accounting standards pertaining to such arrangements. Cash consideration received from a vendor is generally
presumed to be a rebate or an allowance and is accounted for as a reduction of merchandise purchase costs as
earned. However, certain specific, incremental and otherwise qualifying SG&A expenses related to the promotion or
sale of vendor products may be offset by cash consideration received from vendors, in accordance with
arrangements such as cooperative advertising, when earned for dollar amounts up to but not exceeding actual
incremental costs.
Prepaid expenses and other current assets
Prepaid expenses and other current assets include prepaid amounts for maintenance, business licenses,
advertising, and insurance, and amounts receivable for certain vendor rebates (primarily those expected to be
collected in cash) and coupons.
Property and equipment
Property and equipment acquired is recorded at cost. The Company records depreciation and amortization
on a straight-line basis over the assets’ estimated useful lives. Amounts included in the Company’s property and
equipment balances and their estimated lives are summarized as follows:
January 29, January 31,
Life
2021
2020
(In thousands)
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indefinite $ 224,628 $ 220,228
86,636
Land improvements . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 -
1,290,673
656,234
Leasehold improvements . . . . . . . . . . . . . . . . . . . . .
Furniture, fixtures and equipment . . . . . . . . . . . . . .
3,782,016
Construction in progress . . . . . . . . . . . . . . . . . . . . .
62,183
Right of use assets - finance leases . . . . . . . . . . . . . Various
—
6,097,970
2,819,611
$ 3,899,997 $ 3,278,359
Less accumulated depreciation and amortization. .
Net property and equipment . . . . . . . . . . . . . . . . . .
93,169
1,329,309
782,858
4,487,665
183,593
163,108
7,264,330
3,364,333
3 -
40
10
(a)
20
(a) Depreciated over the lesser of the life of the applicable lease term or the estimated
useful life of the asset.
Depreciation and amortization expense related to property and equipment was approximately $569.3
million, $500.4 million and $454.1 million for 2020, 2019 and 2018, respectively. Interest on borrowed funds during
the construction of property and equipment is capitalized where applicable. Interest costs of less than $0.1 million,
$2.7 million, and $3.7 million were capitalized in 2020, 2019 and 2018, respectively.
Impairment of long-lived assets
When indicators of impairment are present, the Company evaluates the carrying value of long-lived assets,
excluding goodwill and other indefinite-lived intangible assets, in relation to the operating performance and future
cash flows or the appraised values of the underlying assets. Generally, the Company’s policy is to review for
impairment stores open more than three years for which current cash flows from operations are negative.
Impairment results when the carrying value of the assets exceeds the undiscounted future cash flows expected to be
generated by the assets. The Company’s estimate of undiscounted future cash flows is based upon historical
operations of the stores and estimates of future store profitability which encompasses many factors that are subject
50
2020 Form 10-K
to variability and difficult to predict. If a long-lived asset is found to be impaired, the amount recognized for
impairment is equal to the difference between the carrying value and the asset’s estimated fair value. The fair value
is estimated based primarily upon estimated future cash flows over the asset’s remaining useful life (discounted at
the Company’s credit adjusted risk-free rate) or other reasonable estimates of fair market value. Assets to be
disposed of are adjusted to the fair value less the cost to sell if less than the book value.
The Company recorded impairment charges included in SG&A expense of approximately $2.7 million in
2020, $3.6 million in 2019 and $4.1 million in 2018, to reduce the carrying value of certain of its stores’ assets. Such
action was deemed necessary based on the Company’s evaluation that such amounts would not be recoverable
primarily due to insufficient sales or excessive costs resulting in the carrying value of the assets exceeding the
estimated undiscounted future cash flows generated by the assets at these locations.
Goodwill and other intangible assets
If not deemed indefinite, the Company amortizes intangible assets over their estimated useful lives.
Goodwill and intangible assets with indefinite lives are tested for impairment annually or more frequently if
indicators of impairment are present. Definite lived intangible assets are tested for impairment if indicators of
impairment are present. Impaired assets are written down to fair value as required. No impairment of intangible
assets has been identified during any of the periods presented.
In accordance with accounting standards for goodwill and indefinite-lived intangible assets, an entity has
the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more
likely than not that goodwill or an indefinite-lived intangible asset is impaired. If after such assessment an entity
concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity
concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test.
If the results of such test indicate impairment, the associated assets must be written down to fair value as described
in further detail below.
The quantitative goodwill impairment test requires management to make judgments in determining what
assumptions to use in the calculation. The process consists of comparing the fair value of the reporting unit to its
carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying amount,
management would then determine if the difference between the carrying amount and fair value is greater than the
carrying amount of goodwill allocated to the reporting unit. If it is, the impairment recognized would be equal to the
total carrying amount of goodwill allocated to the reporting unit, and if not, impairment would be recognized equal
to the difference between the carrying amount of the reporting unit and its fair value.
The quantitative impairment test for intangible assets compares the fair value of the intangible asset with its
carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is
recognized in an amount equal to that excess.
The Company’s goodwill balance has an indefinite life and is not expected to be deductible for tax
purposes. Substantially all of the Company’s other intangible assets are its trade names and trademarks which have
an indefinite life.
Other assets
Noncurrent Other assets consist primarily of qualifying prepaid expenses for maintenance, beer and wine
licenses, and utility, security and other deposits.
2020 Form 10-K
51
Accrued expenses and other liabilities
Accrued expenses and other consist of the following:
January 29, January 31,
(In thousands)
Compensation and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Self-insurance reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes (other than taxes on income) . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020
2021
269,032 $ 135,492
109,291
110,321
192,656
318,552
271,717
308,647
$ 1,006,552 $ 709,156
Included in other accrued expenses are liabilities for freight expense, interest, utilities, maintenance and
legal settlements.
Insurance liabilities
The Company retains a significant portion of risk for its workers’ compensation, employee health, general
liability, property, automobile, and certain third-party landlord general liability claim exposures. Accordingly,
provisions are made for the Company’s estimates of such risks which are recorded as self-insurance reserves
pursuant to Company policy. The undiscounted future claim costs for the workers’ compensation, general liability,
landlord liability, and health claim risks are derived using actuarial methods which are sensitive to significant
assumptions such as loss development factors, trend factors, pure loss rates, and projected claim counts. To the
extent that subsequent claim costs vary from the Company’s estimates, future results of operations will be affected
as the reserves are adjusted.
Ashley River Insurance Company (“ARIC”), a Tennessee-based wholly owned captive insurance
subsidiary of the Company, charges the operating subsidiary companies premiums to insure the retained workers’
compensation, medical stop-loss, and non-property general liability exposures. Pursuant to Tennessee insurance
regulations, ARIC maintains certain levels of cash and cash equivalents related to its self-insured exposures.
Leases
Effective in 2019, the Company records right of use lease assets and lease liabilities on its balance sheet.
Lease liabilities are recorded at a discount based upon the Company’s estimated collateralized incremental
borrowing rate. Factors incorporated into the calculation of lease discount rates include the valuations and yields of
the Company’s senior notes, their credit spread over comparable U.S. Treasury rates, and an index of the credit
spreads for all North American investment grade companies by rating. To determine an indicative secured rate, the
Company uses the estimated credit spread improvement that would result from an upgrade of one ratings
classification by tenor.
Also effective in 2019, the Company records single lease cost on a straight-line basis over the base, non-
cancelable lease term commencing on the date that the Company takes physical possession of the property from the
landlord, which may include a period prior to the opening of a store or other facility to make any necessary
leasehold improvements and install fixtures. Any tenant allowances received are recorded as a reduction of the right
of use asset. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense
for such leases is recognized on a straight-line basis over the lease term. The Company combines lease and nonlease
components. Many leases include one or more options to renew, and the exercise of lease renewal options is at the
Company’s sole discretion. The Company’s lease agreements do not contain any material residual value guarantees
or material restrictive covenants.
For years prior to 2019, rent expense was recognized over the term of the lease. The Company recorded
minimum rental expense on a straight-line basis over the base, non-cancelable lease term commencing on the date
that the Company took physical possession of the property from the landlord. When a lease contained a
predetermined fixed escalation of the minimum rent, the Company recognized the related rent expense on a straight-
line basis and recorded the difference between the recognized rental expense and the amounts payable under the
52
2020 Form 10-K
lease as deferred rent. Tenant allowances, to the extent received, were recorded as deferred incentive rent and were
amortized as a reduction to rent expense over the term of the lease. The difference between the calculated expense
and the amounts paid result in a liability which was classified in other long-term liabilities in the consolidated
balance sheet.
Other liabilities
January 29, January 31,
(In thousands)
Self-insurance reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 134,765 $ 131,281
Payroll tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,395
$ 263,691 $ 172,676
81,488
47,438
2020
2021
Fair value accounting
The Company utilizes accounting standards for fair value, which include the definition of fair value, the
framework for measuring fair value, and disclosures about fair value measurements. Fair value is a market-based
measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based
on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering
market participant assumptions in fair value measurements, fair value accounting standards establish a fair value
hierarchy that distinguishes between market participant assumptions based on market data obtained from sources
independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and
the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within
Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the
Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are
directly or indirectly observable for the asset or liability. Level 2 inputs may include quoted prices for similar assets
and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted
prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted
intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are based on an entity’s own
assumptions, as there is little, if any, observable market activity. In instances where the fair value measurement is
based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the
entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement
in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in
its entirety requires judgment and considers factors specific to the asset or liability.
Other comprehensive income
The Company previously recorded a loss on the settlement of derivatives associated with the issuance of
long-term debt in 2013 which was deferred to other comprehensive income and is being amortized as an increase to
interest expense over the 10-year period of the debt’s maturity.
Revenue recognition
The Company recognizes retail sales in its stores at the time the customer takes possession of merchandise.
All sales are net of discounts and are presented net of taxes assessed by governmental authorities that are imposed
concurrent with those sales.
The Company recognizes gift card sales revenue at the time of redemption. The liability for gift cards is
established for the cash value at the time of purchase of the gift card. The liability for outstanding gift cards was
approximately $8.2 million and $6.0 million at January 29, 2021 and January 31, 2020, respectively, and is recorded
in Accrued expenses and other liabilities. Estimated breakage revenue, a percentage of gift cards that will never be
redeemed based on historical redemption rates, is recognized over time in proportion to actual gift card redemptions.
2020 Form 10-K
53
The Company recorded breakage revenue of $1.3 million, $1.0 million and $0.8 million in 2020, 2019 and 2018,
respectively.
Advertising costs
Advertising costs are expensed upon performance, “first showing” or distribution, and are reflected in
SG&A expenses net of earned cooperative advertising amounts provided by vendors which are specific, incremental
and otherwise qualifying expenses related to the promotion or sale of vendor products for dollar amounts up to but
not exceeding actual incremental costs. Advertising costs were $107.4 million, $91.0 million and $70.5 million in
2020, 2019 and 2018, respectively. These costs primarily include promotional circulars, targeted circulars
supporting new stores, television and radio advertising, and in-store signage. Vendor funding for cooperative
advertising offset reported expenses by $33.4 million, $34.7 million and $35.0 million in 2020, 2019 and 2018,
respectively.
Share-based payments
The Company recognizes compensation expense for share-based compensation based on the fair value of
the awards on the grant date. Forfeitures are estimated at the time of valuation and reduce expense ratably over the
vesting period. This estimate may be adjusted periodically based on the extent to which actual forfeitures differ, or
are expected to differ, from the prior estimate. The forfeiture rate is the estimated percentage of share-based awards
granted that are expected to be forfeited or canceled before becoming fully vested. The Company bases this estimate
on historical experience or estimates of future trends, as applicable. An increase in the forfeiture rate will decrease
compensation expense.
The fair value of each option grant is separately estimated and amortized into compensation expense on a
straight-line basis between the applicable grant date and each vesting date. The Company has estimated the fair
value of all stock option awards as of the grant date by applying the Black-Scholes-Merton option pricing valuation
model. The application of this valuation model involves assumptions that are judgmental and highly sensitive to
variation in the determination of compensation expense.
The Company calculates compensation expense for restricted stock, share units and similar awards as the
difference between the market price of the underlying stock or similar award on the grant date and the purchase
price, if any. Such expense is recognized on a straight-line basis for time-based awards and on an accelerated or
straight-line basis for performance awards depending on the period over which the recipient earns the awards.
Store pre-opening costs
Pre-opening costs related to new store openings and the related construction periods are expensed as
incurred.
Income taxes
Under the accounting standards for income taxes, the asset and liability method is used for computing the
future income tax consequences of events that have been recognized in the Company’s consolidated financial
statements or income tax returns. Deferred income tax expense or benefit is the net change during the year in the
Company’s deferred income tax assets and liabilities.
The Company includes income tax related interest and penalties as a component of the provision for
income tax expense.
Income tax reserves are determined using a methodology which requires companies to assess each income
tax position taken using a two-step process. A determination is first made as to whether it is more likely than not that
the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax
position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the
largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position.
54
2020 Form 10-K
Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax
law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove
to be inaccurate, the resulting adjustments could be material to the Company’s future financial results.
Management estimates
The preparation of financial statements and related disclosures in conformity with accounting principles
generally accepted in the United States requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
Accounting standards
In August 2018, the Financial Accounting Standards Board (“FASB”) issued guidance related to the
accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. These
amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a
service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-
use software, as well as hosting arrangements that include an internal use software license. This guidance is effective
for public business entities for fiscal years, and interim periods within those years, beginning after December 15,
2019, and early adoption is permitted. The Company adopted this guidance on a prospective basis and such adoption
had an immaterial effect on the Company’s consolidated financial position and results of operations.
Also in August 2018, the FASB issued guidance related to the disclosure requirements for fair value
measurement. This guidance added, modified, and removed certain disclosure requirements related to assets and
liabilities recorded at fair value. The majority of this guidance pertains to assets and liabilities classified in Level 3
of the fair value hierarchy, and the Company has no such assets or liabilities. This guidance is effective for public
business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, and
early adoption is permitted. The adoption of this guidance did not affect the Company’s consolidated results of
operations, financial position or cash flows.
In January 2017, the FASB issued amendments to existing guidance related to the subsequent measurement
of goodwill. Subsequent to adoption, the Company will perform its annual, or interim, goodwill impairment test by
comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the
amount by which the carrying amount exceeds the reporting unit’s fair value. This guidance is effective for public
business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, and
early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after
January 1, 2017. The amendments are being applied on a prospective basis. The adoption of this guidance did not
affect the Company’s consolidated results of operations, financial position or cash flows.
In June 2016, the FASB issued guidance related to measurement requirements for credit losses on financial
instruments. These amendments require a financial asset or a group of financial assets measured at amortized cost
basis to be presented at the net amount expected to be collected. The guidance requires measurement of expected
credit losses based on relevant information about past events, including historical experience, current conditions, and
reasonable and supportable forecasts. This guidance is effective for public business entities for fiscal years, and
interim periods within those years, beginning after December 15, 2019, and early adoption is permitted. The
adoption of this guidance did not affect the Company’s consolidated results of operations, financial position or cash
flows.
The Company adopted new accounting guidance related to leases as of February 2, 2019. The cumulative
effect of applying the standard resulted in an adjustment to retained earnings of $28.8 million at February 2, 2019,
primarily for the elimination of deferred gain on a prior sale-leaseback transaction. Because the standard was
adopted under the modified retrospective approach, it did not impact the Company’s historical consolidated net
income or cash flows.
2020 Form 10-K
55
In October 2016, the FASB issued amendments to existing guidance related to accounting for intra-entity
transfers of assets other than inventory, which affected the Company’s historical accounting for intra-entity transfers
of certain intangible assets. This guidance was effective for the Company in 2018. The amendments were applied on
a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the
beginning of the period of adoption. The Company adopted this guidance effective February 3, 2018 which resulted
in an increase in deferred income tax liabilities and a decrease in retained earnings of $41.3 million.
Reclassifications
Certain financial disclosures relating to prior periods have been reclassified to conform to the current year
presentation where applicable.
2.
Earnings per share
Earnings per share is computed as follows (in thousands except per share data):
Basic earnings per share . . . . . . . . . . . . . . . . . . . . . $ 2,655,050
Effect of dilutive share-based awards . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . $ 2,655,050
Basic earnings per share . . . . . . . . . . . . . . . . . . . . . $ 1,712,555
Effect of dilutive share-based awards . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . $ 1,712,555
Net
Income
Net
Income
Net
Income
2020
Weighted
Average
Shares
248,171 $
1,905
250,076 $
Per Share
Amount
10.70
10.62
2019
Weighted
Average
Shares
256,553 $
1,500
258,053 $
Per Share
Amount
6.68
6.64
2018
Weighted
Average
Shares
265,155 $
950
266,105 $
Per Share
Amount
5.99
5.97
Basic earnings per share . . . . . . . . . . . . . . . . . . . . . $ 1,589,472
Effect of dilutive share-based awards . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . $ 1,589,472
Basic earnings per share is computed by dividing net income by the weighted average number of shares of
common stock outstanding during the year. Diluted earnings per share is determined based on the dilutive effect of
share-based awards using the treasury stock method.
Share-based awards that were outstanding at the end of the respective periods, but were not included in the
computation of diluted earnings per share because the effect of exercising such options would be antidilutive, were
0.2 million, 0.3 million and 0.8 million in 2020, 2019 and 2018, respectively.
56
2020 Form 10-K
3.
Income taxes
The provision (benefit) for income taxes consists of the following:
(In thousands)
Current:
2020
2019
2018
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 614,207 $ 368,451 $ 320,361
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
159
53,091
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
373,611
102
65,215
433,768
127
100,002
714,336
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,433
(104)
2,665
34,994
48,262
45,966
(38)
(15)
4,109
9,456
52,333
55,407
$ 749,330 $ 489,175 $ 425,944
A reconciliation between actual income taxes and amounts computed by applying the federal statutory rate
to income before income taxes is summarized as follows:
(Dollars in thousands)
U.S. federal statutory rate on earnings before
2020
2019
2018
income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 714,920 21.0 % $ 462,364 21.0 % $ 423,237 21.0 %
State income taxes, net of federal income tax
benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jobs credits, net of federal income taxes . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81,117
(27,479)
(19,228)
$ 749,330
2.4
60,936
(0.8)
(27,768)
(6,357)
(0.6)
22.0 % $ 489,175
2.8
44,584
(1.3)
(27,506)
(14,371)
(0.3)
22.2 % $ 425,944
2.2
(1.4)
(0.7)
21.1 %
The effective income tax rate for 2020 was 22.0% compared to a rate of 22.2% for 2019 which represents a
net decrease of 0.2 percentage points. The effective income tax rate was lower in 2020 primarily due to increased tax
benefits associated with share-based compensation and a larger income tax rate benefit from state taxes offset by a
lower income tax rate benefit from federal income tax credits due primarily to higher pre-tax earnings in 2020
compared to 2019.
The effective income tax rate for 2019 was 22.2% compared to a rate of 21.1% for 2018 which represents a
net increase of 1.1 percentage points. The effective income tax rate was higher in 2019 primarily due to an increase
in income taxes resulting from changes in state income tax laws and federal and state income tax benefits arising
from the Tax Cuts and Jobs Act in 2018 that did not reoccur in 2019.
2020 Form 10-K
57
Deferred taxes reflect the effects of temporary differences between carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of
the Company’s deferred tax assets and liabilities are as follows:
(In thousands)
Deferred tax assets:
January 29,
January 31,
2021
2020
Deferred compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued incentive compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit of income tax and interest reserves related to uncertain tax positions .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State tax net operating loss carry forwards, net of federal tax . . . . . . . . . . . . . . . . . .
State tax credit carry forwards, net of federal tax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,556
16,788
401
2,167,780
5,895
16,721
16,321
1,076
164
3,702
555
7,534
2,609,275 2,244,493
Less valuation allowances, net of federal income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
(4,077)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,605,198 2,240,416
Deferred tax liabilities:
9,161 $
52,195
650
2,459,976
6,550
46,083
19,495
730
189
6,823
804
6,619
(4,077)
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(389,080)
Lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,433,195) (2,143,996)
(59,075)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(310,862)
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11,933)
Prepaid insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(697)
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,315,747) (2,915,643)
(675,227)
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (710,549) $
(74,985)
(312,258)
(13,532)
(498)
(481,279)
The Company has state tax credit carryforwards of approximately $6.6 million (net of federal benefit) that
will expire beginning in 2022 through 2028 and the Company has approximately $20.9 million of state apportioned
net operating loss carryforwards, which will begin to expire in 2032 and will continue through 2039.
The Company established a valuation allowance for the state tax credit carryforwards, in the amount of
$4.4 million (net of federal benefit) increasing income tax expense in 2017. In 2019, the Company updated its
projections, releasing $0.4 million of valuation allowance (net of federal benefit). Management continues to believe
that results from operations will not generate sufficient taxable income to realize the remaining state tax credits
before they expire, and therefore made no adjustment to the valuation allowance in 2020.
Management believes that it is more likely than not that the Company’s results of operations and its
existing deferred tax liabilities will generate sufficient taxable income to realize the remaining deferred tax assets.
The Company’s 2016 and earlier tax years are not open for further examination by the Internal Revenue
Service (“IRS”). The IRS, at its discretion, may choose to examine the Company’s 2017 through 2019 fiscal year
income tax filings. The Company has various state income tax examinations that are currently in progress.
Generally, with few exceptions, the Company’s 2017 and later tax years remain open for examination by the various
state taxing authorities.
As of January 29, 2021, accruals for uncertain tax benefits, interest expense related to income taxes and
potential income tax penalties were $7.5 million, $0.5 million and $0.0 million, respectively, for a total of $8.0
million. As of January 31, 2020, accruals for uncertain tax benefits, interest expense related to income taxes and
58
2020 Form 10-K
potential income tax penalties were $5.1 million, $0.4 million and $0.0 million, respectively, for a total of $5.5
million. These totals are reflected in noncurrent Other liabilities in the consolidated balance sheets.
The Company’s reserve for uncertain tax positions is expected to be reduced by $3.4 million in the coming
twelve months as a result of expiring statutes of limitations. As of January 29, 2021 and January 31, 2020,
approximately $7.5 million and $5.1 million, respectively, of the uncertain tax positions would impact the
Company’s effective income tax rate if the Company were to recognize the tax benefit for these positions.
The amounts associated with uncertain tax positions included in income tax expense consists of the
following:
(In thousands)
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . $
Income tax related interest expense (benefit) . . . . . . . . .
Income tax related penalty expense (benefit) . . . . . . . . .
2020
2,411 $
104
—
2019
130 $
(406)
(882)
2018
3,919
133
33
A reconciliation of the uncertain income tax positions from February 3, 2018 through January 29, 2021 is
as follows:
(In thousands)
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Increases—tax positions taken in the current year . . . . .
Increases—tax positions taken in prior years . . . . . . . . .
Decreases—tax positions taken in prior years . . . . . . . .
Statute expirations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2020
5,090 $
—
3,857
(1,445)
—
—
7,502 $
2019
4,960 $
—
1,239
(1,109)
—
—
5,090 $
2018
1,041
95
3,914
—
—
(90)
4,960
4.
Leases
As of January 29, 2021, the Company’s primary leasing activities were real estate leases for most of its
retail store locations and certain of its distribution facilities. Many of the Company’s store locations are subject to
build-to-suit arrangements with landlords which typically carry a primary lease term of up to 15 years. The
Company does not control build-to-suit properties during the construction period. Store locations not subject to
build-to-suit arrangements are typically shorter-term leases. Certain of the Company’s leased store locations have
variable payments based upon actual costs of common area maintenance, real estate taxes and property and liability
insurance. In addition, some of the Company’s leased store locations have provisions for variable payments based
upon a specified percentage of defined sales volume. The Company’s lease agreements generally do not contain
material restrictive covenants.
Most of the Company’s leases include one or more options to renew and extend the lease term. The
exercise of lease renewal options is at the Company’s sole discretion. Generally, a renewal option is not deemed to
be reasonably certain to be exercised until such option is legally executed. The Company’s leases do not include
purchase options or residual value guarantees on the leased property. The depreciable life of leasehold
improvements is limited by the expected lease term.
Substantially all of the Company’s leases are classified as operating leases and the associated assets and
liabilities are presented as separate captions in the consolidated balance sheet. Finance lease assets are included in
net property and equipment, and finance lease liabilities are included in long-term obligations, in the consolidated
balance sheet. At January 29, 2021, the weighted-average remaining lease term for the Company’s leases was 9.9
years, and the weighted average discount rate was 3.9%. For 2020 and 2019, operating lease cost of $1.38 billion
and $1.27 billion, respectively, were reflected as selling, general and administrative expenses in the consolidated
statements of income. Cash paid for amounts included in the measurement of operating lease liabilities of $1.39
billion and $1.28 billion, respectively, were reflected in cash flows from operating activities in the consolidated
statement of cash flows for 2020 and 2019.
2020 Form 10-K
59
The scheduled maturity of the Company’s operating lease liabilities is as follows:
(In thousands)
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,419,082
1,366,883
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,305,624
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,231,261
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,106,494
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,936,773
Total lease payments (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,366,117
Less imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,906,650)
Present value of lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,459,467
a) Excludes approximately $0.7 billion of legally binding minimum lease payments for leases signed which have
not yet commenced.
Rent expense under all operating leases in 2018, prior to the adoption of current lease accounting guidance,
included minimum rentals of $1.15 billion and contingent rentals of $4.7 million.
5.
Current and long-term obligations
Consolidated current and long-term obligations consist of the following:
January 29, January 31,
(In thousands)
Revolving Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3.250% Senior Notes due April 15, 2023 (net of discount of $583 and $837) . . . . . . .
4.150% Senior Notes due November 1, 2025 (net of discount of $412 and $489) . . . .
3.875% Senior Notes due April 15, 2027 (net of discount of $294 and $336) . . . . . . .
4.125% Senior Notes due May 1, 2028 (net of discount of $383 and $428) . . . . . . . . .
3.500% Senior Notes due April 3, 2030 (net of discount of $623) . . . . . . . . . . . . . . . .
4.125% Senior Notes due April 3, 2050 (net of discount of $4,945) . . . . . . . . . . . . . . .
Unsecured commercial paper notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt issuance costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
2020
— $
—
899,163
499,511
599,664
499,572
—
—
425,200
4,895
(16,012)
$ 4,130,975 $ 2,911,993
899,417
499,588
599,706
499,617
999,377
495,055
—
164,365
(26,150)
At January 29, 2021, the Company maintained a $1.25 billion senior unsecured revolving credit facility
(the “Revolving Facility”) that provides for the issuance of letters of credit up to $175.0 million and is scheduled to
mature on September 10, 2024.
Borrowings under the Revolving Facility bear interest at a rate equal to an applicable interest rate margin
plus, at the Company’s option, either (a) LIBOR or (b) a base rate (which is usually equal to the prime rate). The
applicable interest rate margin for borrowings as of January 29, 2021 was 1.015% for LIBOR borrowings and
0.015% for base-rate borrowings. The Company is also required to pay a facility fee, payable on any used and
unused commitment amounts of the Revolving Facility, and customary fees on letters of credit issued under the
Revolving Facility. As of January 29, 2021, the facility fee rate was 0.11%. The applicable interest rate margins for
borrowings, the facility fees and the letter of credit fees under the Revolving Facility are subject to adjustment from
time to time based on the Company’s long-term senior unsecured debt ratings.
The Revolving Facility contains a number of customary affirmative and negative covenants that, among
other things, restrict, subject to certain exceptions, the Company’s ability to: incur additional liens; sell all or
substantially all of the Company’s assets; consummate certain fundamental changes or change in the Company’s
lines of business; and incur additional subsidiary indebtedness. The Revolving Facility also contains financial
60
2020 Form 10-K
covenants which require the maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio.
As of January 29, 2021, the Company was in compliance with all such covenants. The Revolving Facility also
contains customary events of default.
On June 11, 2018, the Company voluntarily prepaid the entire $175.0 million outstanding balance of its
senior unsecured term loan facility and recognized an associated loss of $1.0 million which is reflected in Other
(income) expense in the consolidated statement of income for the year ended February 1, 2019.
As of January 29, 2021, the Company had no outstanding borrowings, outstanding letters of credit of $3.5
million, and borrowing availability of $1.25 billion under the Revolving Facility that, due to its intention to maintain
borrowing availability related to the commercial paper program described below, could contribute incremental
liquidity of $1.07 billion. In addition, the Company had outstanding letters of credit of $77.7 million which were
issued pursuant to separate agreements.
As of January 29, 2021, the Company had a commercial paper program under which the Company may
issue unsecured commercial paper notes (the “CP Notes”) from time to time in an aggregate amount not to exceed
$1.0 billion outstanding at any time. The CP Notes have maturities of up to 364 days from the date of issue and rank
equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness. The
Company intends to maintain available commitments under the Revolving Facility in an amount at least equal to the
amount of CP Notes outstanding at any time. As of January 29, 2021, the Company’s consolidated balance sheet
reflected no outstanding CP Notes. CP Notes totaling $181.0 million were held by a wholly-owned subsidiary of the
Company and are therefore not reflected on the consolidated balance sheet.
On April 3, 2020, the Company issued $1.0 billion aggregate principal amount of 3.5% senior notes due
2030 (the “2030 Senior Notes”), net of discount of $0.7 million, and $500.0 million aggregate principal amount of
4.125% senior notes due 2050 (the “2050 Senior Notes”), net of discount of $5.0 million. The 2030 Senior Notes are
scheduled to mature on April 3, 2030 and the 2050 Senior Notes are scheduled to mature on April 3, 2050. Interest
on the 2030 Senior Notes and the 2050 Senior Notes is payable in cash on April 3 and October 3 of each year. The
Company incurred $13.6 million of debt issuance costs associated with the issuance of the 2030 Senior Notes and
the 2050 Senior Notes.
On April 10, 2018, the Company issued $500.0 million aggregate principal amount of 4.125% senior notes
due 2028 (the “2028 Senior Notes”), net of discount of $0.5 million, which are scheduled to mature on May 1, 2028.
Interest on the 2028 Senior Notes is payable in cash on May 1 and November 1 of each year. The Company incurred
$4.4 million of debt issuance costs associated with the issuance of the 2028 Senior Notes.
Effective April 15, 2018, the Company redeemed $400.0 million aggregate principal amount of outstanding
1.875% senior notes due 2018 (the “2018 Senior Notes”). There was no gain or loss associated with the redemption.
The Company funded the redemption price for the 2018 Senior Notes with proceeds from the issuance of the 2028
Senior Notes.
Collectively, the Company’s Senior Notes due 2023, 2025, 2027, 2028, 2030 and 2050 comprise the
“Senior Notes”, each of which were issued pursuant to an indenture as supplemented and amended by supplemental
indentures relating to each series of Senior Notes (as so supplemented and amended, the “Senior Indenture”). The
Company may redeem some or all of its Senior Notes at any time at redemption prices set forth in the Senior
Indenture. Upon the occurrence of a change of control triggering event, which is defined in the Senior Indenture,
each holder of the Senior Notes has the right to require the Company to repurchase some or all of such holder’s
Senior Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to, but excluding, the repurchase date.
The Senior Indenture contains covenants limiting, among other things, the ability of the Company and its
subsidiaries to (subject to certain exceptions): consolidate, merge, sell or otherwise dispose of all or substantially all
of the Company’s assets; and to incur or guarantee indebtedness secured by liens on any shares of voting stock of
significant subsidiaries.
2020 Form 10-K
61
The Senior Indenture also provides for events of default which, if any of them occurs, would permit or
require the principal of and accrued interest on the Senior Notes to become or to be declared due and payable, as
applicable.
Scheduled debt maturities at January 29, 2021 for the Company’s fiscal years listed below are as follows
(in thousands): 2021 - $4,127; 2022 - $7,201; 2023 - $906,564; 2024 - $6,759; 2025 - $506,963; thereafter -
$2,732,751.
6.
Assets and liabilities measured at fair value
The following table presents the Company’s assets and liabilities required to be measured at fair value as of
January 29, 2021, aggregated by the level in the fair value hierarchy within which those measurements are
classified.
(In thousands)
Liabilities:
Quoted Prices
in Active
Markets
for Identical
Assets and
Liabilities
(Level 1)
Significant
Other
Significant
Observable Unobservable
Inputs
(Level 2)
Inputs
(Level 3)
Total Fair
Value at
January 29,
2021
Long-term obligations (a) . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,541,894 $ 164,365 $
Deferred compensation (b) . . . . . . . . . . . . . . . . . . . . . . . . .
34,800
—
— $ 4,706,259
34,800
—
(a) Included in the consolidated balance sheet at book value as Long-term obligations of $4,130,975.
(b) Reflected at fair value in the consolidated balance sheet as a component of Accrued expenses and other current
liabilities of $2,654 and a component of noncurrent Other liabilities of $32,146.
The carrying amounts reflected in the consolidated balance sheets for cash, cash equivalents, short-term
investments, receivables and payables approximate their respective fair values. The Company does not have any
recurring fair value measurements using significant unobservable inputs (Level 3) as of January 29, 2021.
7.
Commitments and contingencies
Legal proceedings
From time to time, the Company is a party to various legal matters in the ordinary course of its business,
including actions by employees, consumers, suppliers, government agencies, or others. The Company has recorded
accruals with respect to these matters, where appropriate, which are reflected in the Company’s consolidated
financial statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and
therefore an accrual has not been made. In 2019, the Company recorded an accrual of $31.0 million for losses the
Company believes are both probable and reasonably estimable relating to certified class actions and associated
matters, including the matters discussed below under Consumer/Product Litigation.
Except as described below and based on information currently available, the Company believes that its
pending legal matters, both individually and in the aggregate, will be resolved without a material adverse effect on
the Company’s consolidated financial statements as a whole. However, litigation and other legal matters involve an
element of uncertainty. Adverse decisions and settlements, including any required changes to the Company’s
business, or other developments in such matters could affect our consolidated operating results in future periods or
result in liability or other amounts material to the Company’s annual consolidated financial statements.
Consumer/Product Litigation
In December 2015 the Company was first notified of several lawsuits in which plaintiffs allege violation of
state law, including state consumer protection laws, relating to the labeling, marketing and sale of certain Dollar
General private-label motor oil. Each of these lawsuits, as well as additional, similar lawsuits filed after December
62
2020 Form 10-K
2015, was filed in, or removed to, various federal district courts of the United States (collectively “Motor Oil
Lawsuits”).
On June 2, 2016, the Motor Oil Lawsuits were centralized in a matter styled In re Dollar General Corp.
Motor Oil Litigation, Case MDL No. 2709, before the United States District Court for the Western District of
Missouri (“Motor Oil MDL”). In their consolidated amended complaint, the plaintiffs in the Motor Oil MDL sought
to certify two nationwide classes and multiple statewide sub-classes and for each putative class member some or all
of the following relief: compensatory damages, injunctive relief, statutory damages, punitive damages and attorneys’
fees. To the extent additional consumer lawsuits alleging violation of laws relating to the labeling, marketing and
sale of Dollar General private-label motor oil have been or will be filed, the Company expects that such lawsuits
will be transferred to the Motor Oil MDL.
On August 20, 2018, plaintiffs in the Motor Oil MDL moved to certify two nationwide classes relating to
their claims of alleged unjust enrichment and breach of implied warranties. In addition, plaintiffs moved to certify a
multi-state class relating to their claims of breach of implied warranties and multiple statewide classes relating to
alleged unfair trade practices/consumer fraud, unjust enrichment and breach of implied warranty claims. The
Company opposed the plaintiffs’ certification motion. On March 21, 2019, the court granted the plaintiffs’
certification motion as to 16 statewide classes regarding claims of unjust enrichment and 16 statewide classes
regarding state consumer protection laws. Subsequently, the court certified an additional class, bringing the total to
17 statewide classes. The court denied plaintiffs’ certification motion in all other respects. On June 25, 2019, the
United States Court of Appeals for the Eighth Circuit granted the Company’s Petition to Appeal the lower court’s
certification rulings. The Company’s appeal remains pending.
The parties have reached an agreement, which was submitted to the court for preliminary approval on
February 5, 2021, to resolve the Motor Oil MDL for an amount that is immaterial to the Company’s consolidated
financial statements as a whole. The final fairness hearing is scheduled for June 22, 2021. At this time, although
probable, it is not certain that the court will grant final approval to the settlement.
In May 2017, the Company received a Notice of Proposed Action from the Office of the New Mexico
Attorney General (the “New Mexico AG”) which alleges that the Company’s labeling, marketing and sale of certain
Dollar General private-label motor oil violated New Mexico law (the “New Mexico Motor Oil Matter”). The State is
represented in connection with this matter by counsel for plaintiffs in the Motor Oil MDL.
On June 20, 2017, the New Mexico AG filed an action in the First Judicial District Court, County of Santa
Fe, New Mexico pertaining to the New Mexico Motor Oil Matter. (Hector H. Balderas v. Dolgencorp, LLC, Case
No. D-101-cv-2017-01562).
The parties have reached an agreement in principle to resolve the New Mexico Motor Oil Matter for an
amount that is immaterial to the Company’s consolidated financial statements as a whole.
On September 1, 2017, the Mississippi Attorney General (the “Mississippi AG”), who also is represented
by the counsel for plaintiffs in the Motor Oil MDL, filed an action in the Chancery Court of the First Judicial
District of Hinds County, Mississippi alleging that the Company’s labeling, marketing and sale of certain Dollar
General private-label motor oil violated Mississippi law. (Jim Hood v. Dollar General Corporation, Case No.
G2017-1229 T/1) (the “Mississippi Motor Oil Matter”). The Company removed this matter to Mississippi federal
court on October 5, 2017, and filed a motion to dismiss the action. The matter was transferred to the Motor Oil MDL
and the Mississippi AG moved to remand it to state court. (Jim Hood v. Dollar General Corporation, N.D. Miss.,
Case No. 3:17-cv-801-LG-LRA). On May 7, 2019, the Mississippi AG renewed its motion to remand. The
Company’s and the Mississippi AG’s above-referenced motions are pending.
On January 30, 2018, the Company received a Civil Investigative Demand (“CID”) from the Office of the
Louisiana Attorney General (the “Louisiana AG”) requesting information concerning the Company’s labeling,
marketing and sale of certain Dollar General private-label motor oil (the “Louisiana Motor Oil Matter”). In response
to the CID, the Company filed a petition for a protective order on February 20, 2018 in the 19th Judicial District
Court for the Parish of East Baton Rouge, Louisiana seeking to set aside the CID. (In re Dollar General Corp. and
Dolgencorp, LLC, Case No. 666499). On February 7, 2020, the Company reached an agreement with the Louisiana
2020 Form 10-K
63
AG to resolve this matter for an amount that is immaterial to the Company’s consolidated financial statements as a
whole.
The Company is vigorously defending these matters and believes that the labeling, marketing and sale of its
private-label motor oil comply with applicable federal and state requirements and are not misleading. The Company
further believes that these matters are not appropriate for class or similar treatment. At this time, however, except as
to the Louisiana Motor Oil Matter, it is not possible to predict whether these matters ultimately will be permitted to
proceed as a class or in a similar fashion or the size of any putative class or classes. Likewise, except as to the
Louisiana Motor Oil Matter, no assurances can be given that the Company will be successful in its defense of these
matters on the merits or otherwise. Based on its belief that a loss in these matters is both probable and reasonably
estimable, as noted above, during 2019, the Company recorded an accrual for an amount that is immaterial to the
Company’s consolidated financial statements as a whole.
8.
Benefit plans
The Dollar General Corporation 401(k) Savings and Retirement Plan, which became effective on
January 1, 1998, is a safe harbor defined contribution plan and is subject to the Employee Retirement and Income
Security Act (“ERISA”).
A participant’s right to claim a distribution of his or her account balance is dependent on the plan, ERISA
guidelines and Internal Revenue Service regulations. All active participants are fully vested in all contributions to
the 401(k) plan. During 2020, 2019 and 2018, the Company expensed approximately $30.1 million, $25.0 million
and $20.2 million, respectively, for matching contributions.
The Company also has a compensation deferral plan (“CDP”) and a nonqualified supplemental retirement
plan (“SERP”), known as the Dollar General Corporation CDP/SERP Plan, for a select group of management and
other key employees. The Company incurred compensation expense for these plans of approximately $0.9 million in
2020, $0.8 million in 2019 and $0.7 million in 2018.
The deferred compensation liability associated with the CDP/SERP Plan is reflected in the consolidated
balance sheets as further disclosed in Note 6.
9.
Share-based payments
The Company accounts for share-based payments in accordance with applicable accounting standards,
under which the fair value of each award is separately estimated and amortized into compensation expense over the
service period. The fair value of the Company’s stock option grants are estimated on the grant date using the Black-
Scholes-Merton valuation model. The application of this valuation model involves assumptions that are judgmental
and highly sensitive in the determination of compensation expense. The fair value of the Company’s other share-
based awards discussed below are estimated using the Company’s closing stock price on the grant date. Forfeitures
are estimated at the time of valuation and reduce expense ratably over the vesting period.
On July 6, 2007, the Company’s Board of Directors adopted the 2007 Stock Incentive Plan, which was
subsequently amended and restated on several occasions (as so amended and restated, the “Plan”). The Plan allows
the granting of stock options, stock appreciation rights, and other stock-based awards or dividend equivalent rights
to key employees, directors, consultants or other persons having a service relationship with the Company, its
subsidiaries and certain of its affiliates. The number of shares of Company common stock authorized for grant under
the Plan is 31,142,858.
Generally, share-based awards issued by the Company are in the form of stock options, restricted stock
units and performance share units, and unless noted otherwise, the disclosures that follow refer to such awards. With
limited exceptions, stock options and restricted stock units granted to employees generally vest ratably on an annual
basis over four-year and three-year periods, respectively. Awards granted to board members generally vest over a
one-year period. The number of performance share units earned are based on performance criteria measured over a
period of one to three years, and such awards generally vest over a three-year period. With limited exceptions, the
performance share unit and restricted stock unit awards are payable in shares of common stock on the vesting date.
64
2020 Form 10-K
The weighted average for key assumptions used in determining the fair value of all stock options granted in
the years ended January 29, 2021, January 31, 2020, and February 1, 2019, and a summary of the methodology
applied to develop each assumption, are as follows:
January 29,
2021
January 31,
2020
February 1,
2019
Expected dividend yield. . . . . . . . . . . . . . . .
Expected stock price volatility . . . . . . . . . .
Weighted average risk-free interest rate . . .
Expected term of options (years) . . . . . . . .
0.9 %
26.4 %
0.7 %
5.2
1.1 %
25.3 %
2.3 %
6.2
1.2 %
25.0 %
2.7 %
6.3
Expected dividend yield - This is an estimate of the expected dividend yield on the Company’s stock. An
increase in the dividend yield will decrease compensation expense.
Expected stock price volatility - This is a measure of the amount by which the price of the Company’s
common stock has fluctuated or is expected to fluctuate. An increase in the expected volatility will increase
compensation expense.
Weighted average risk-free interest rate - This is the U.S. Treasury rate for the week of the grant having a
term approximating the expected life of the option. An increase in the risk-free interest rate will increase
compensation expense.
Expected term of options - This is the period of time over which the options granted are expected to remain
outstanding. An increase in the expected term will increase compensation expense.
A summary of the Company’s stock option activity during the year ended January 29, 2021 is as follows:
Options
Issued
Average Remaining
Exercise Contractual
Term in Years
Intrinsic
Value
(Intrinsic value amounts reflected in thousands)
Balance, January 31, 2020 . . . . . . . . . . . 3,319,719 $ 85.34
157.19
Granted . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . .
73.19
Canceled . . . . . . . . . . . . . . . . . . . . . . . . .
115.92
Balance, January 29, 2021 . . . . . . . . . . . 2,911,540 $ 104.69
Exercisable at January 29, 2021 . . . . . . 1,330,225 $ 82.04
673,030
(960,890)
(120,319)
Price
7.0 $ 262,156
5.6 $ 149,743
The weighted average grant date fair value per share of options granted was $34.60, $30.67 and $24.37
during 2020, 2019 and 2018, respectively. The intrinsic value of options exercised during 2020, 2019 and 2018, was
$116.1 million, $26.6 million and $15.4 million, respectively.
The number of performance share unit awards earned is based upon the Company’s financial performance
as specified in the award agreement. A summary of performance share unit award activity during the year ended
January 29, 2021 is as follows:
(Intrinsic value amounts reflected in thousands)
Balance, January 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,448
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,114
Converted to common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,227)
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,282)
Balance, January 29, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367,053 $ 71,432
Units
Issued
Intrinsic
Value
All performance share unit awards at January 29, 2021 are unvested, and the number of such awards which
will ultimately vest will be based in part on the Company’s financial performance in future years. The weighted
average grant date fair value per share of performance share units granted was $154.53, $117.13 and $92.98 during
2020, 2019 and 2018, respectively.
2020 Form 10-K
65
A summary of restricted stock unit award activity during the year ended January 29, 2021 is as follows:
Units
Issued
(Intrinsic value amounts reflected in thousands)
418,669
Balance, January 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
190,156
Converted to common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (201,934)
(37,020)
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, January 29, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
369,871 $ 71,981
Intrinsic
Value
The weighted average grant date fair value per share of restricted stock units granted was $155.73, $117.20
and $93.16 during 2020, 2019 and 2018, respectively.
At January 29, 2021, the total unrecognized compensation cost related to unvested stock-based awards was
$88.9 million with an expected weighted average expense recognition period of 1.9 years.
The fair value method of accounting for share-based awards resulted in share-based compensation expense
(a component of SG&A expenses) and a corresponding reduction in income before and net of income taxes as
follows:
(In thousands)
Year ended January 29, 2021
Stock
Performance Restricted
Options Share Units Stock Units Total
Pre-tax . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,933 $ 27,388 $ 21,288 $ 68,609
Net of tax . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,730 $ 20,240 $ 15,732 $ 50,702
Year ended January 31, 2020
Pre-tax . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,128 $ 13,343 $ 19,118 $ 48,589
9,994 $ 14,319 $ 36,393
Net of tax . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,080 $
Year ended February 1, 2019
Pre-tax . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,556 $
Net of tax . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,902 $
8,597 $ 17,726 $ 40,879
6,439 $ 13,277 $ 30,618
10.
Segment reporting
The Company manages its business on the basis of one reportable operating segment. See Note 1 for a brief
description of the Company’s business. As of January 29, 2021, all of the Company’s operations were located within
the United States with the exception of certain product sourcing operations, which collectively are not material with
regard to assets, results of operations or otherwise to the consolidated financial statements. The following net sales
data is presented in accordance with accounting standards related to disclosures about segments of an enterprise.
(in thousands)
Classes of similar products:
2020
2019
2018
Consumables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,906,685 $ 21,635,890 $ 19,865,086
3,050,282
Seasonal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,506,054
Home products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,203,621
Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33,746,839 $ 27,753,973 $ 25,625,043
4,083,650
2,209,950
1,546,554
3,258,874
1,611,899
1,247,310
11.
Common stock transactions
On August 29, 2012, the Company’s Board of Directors authorized a common stock repurchase program,
which the Board has since increased on several occasions. On March 17, 2021, the Company’s Board of Directors
authorized a $2.0 billion increase to the existing common stock repurchase program, bringing the cumulative total
authorized under the program since its inception to $12.0 billion. The repurchase authorization has no expiration
date and allows repurchases from time to time in open market transactions, including pursuant to trading plans
adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or in privately
66
2020 Form 10-K
negotiated transactions. The timing, manner and number of shares repurchased will depend on a variety of factors,
including price, market conditions, compliance with the covenants and restrictions under the Company’s debt
agreements and other factors. Repurchases under the program may be funded from available cash or borrowings
including under the Company’s Revolving Facility and issuance of CP Notes discussed in further detail in Note 5.
During the years ended January 29, 2021, January 31, 2020, and February 1, 2019, the Company
repurchased approximately 12.3 million shares of its common stock at a total cost of $2.5 billion, approximately 8.3
million shares of its common stock at a total cost of $1.2 billion, and approximately 9.9 million shares of its
common stock at a total cost of $1.0 billion, respectively, pursuant to its common stock repurchase program.
The Company paid quarterly cash dividends of $0.36 per share in 2020. On March 16, 2021, the
Company’s Board of Directors declared a quarterly cash dividend of $0.42 per share, which is payable on or before
April 20, 2021 to shareholders of record on April 6, 2021. The amount and declaration of future cash dividends is
subject to the sole discretion of the Company’s Board of Directors and will depend upon, among other things, the
Company’s results of operations, cash requirements, financial condition, contractual restrictions and other factors
that the Board may deem relevant in its sole discretion.
12.
Quarterly financial data (unaudited)
The following is selected unaudited quarterly financial data for the fiscal years ended January 29, 2021 and
January 31, 2020. Each quarterly period listed below was a 13-week accounting period. The sum of the four quarters
for any given year may not equal annual totals due to rounding.
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(In thousands)
2020:
Net sales . . . . . . . . . . . . . . . . . . . $ 8,448,449 $ 8,684,241 $ 8,199,625 $ 8,414,524
Gross profit . . . . . . . . . . . . . . . . .
2,736,695
Operating profit . . . . . . . . . . . . .
872,224
642,743
Net income . . . . . . . . . . . . . . . . .
Basic earnings per share . . . . . .
2.64
Diluted earnings per share . . . . .
2.62
2,595,692
866,784
650,446
2.58
2.56
2,568,240
773,130
574,260
2.32
2.31
2,818,235
1,042,627
787,601
3.15
3.12
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(In thousands)
2019:
Net sales . . . . . . . . . . . . . . . . . . . $ 6,623,185 $ 6,981,753 $ 6,991,393 $ 7,157,642
Gross profit . . . . . . . . . . . . . . . . .
2,272,763
Operating profit . . . . . . . . . . . . .
720,875
535,437
Net income . . . . . . . . . . . . . . . . .
Basic earnings per share . . . . . .
2.11
Diluted earnings per share . . . . .
2.10
2,002,276
512,237
385,013
1.49
1.48
2,065,086
491,417
365,550
1.43
1.42
2,148,936
577,775
426,555
1.65
1.65
Approximately midway into the first quarter of 2020, the Company began seeing heightened demand from
customers, particularly for consumable products, which continued in varying degrees throughout the balance of the
year. As the first quarter of 2020 progressed, the Company experienced a significant increase in demand in many
non-consumable products. This increased overall customer demand significantly benefited the Company’s results of
operations, and in particular, net sales, gross profit, operating income and net income for each quarter of fiscal 2020.
Although the Company incurred additional payroll related expenses, increased distribution and transportation costs,
as well as other costs throughout fiscal 2020 to meet the significant customer demand and to protect the health and
safety of employees and customers, these costs were more than offset by the incremental sales.
In the second quarter of 2019, the Company incurred expenses for losses the Company believes are both
probable and reasonably estimable relating to certified class actions and associated legal matters totaling $31.0
million ($24.1 million net of tax, or $0.09 per diluted share), which was recognized in Selling, general and
administrative expense in the second quarter of 2019.
2020 Form 10-K
67
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. Under the supervision and with the participation of our
management, including our principal executive officer and principal financial officer, we conducted an evaluation of
our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our
principal executive officer and our principal financial officer concluded that our disclosure controls and procedures
were effective as of the end of the period covered by this report.
(b) Management’s Annual Report on Internal Control Over Financial Reporting. Our management
prepared and is responsible for the consolidated financial statements and all related financial information contained
in this report. This responsibility includes establishing and maintaining adequate internal control over financial
reporting as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act. Our internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with United States generally accepted
accounting principles.
To comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, management designed
and implemented a structured and comprehensive assessment process to evaluate the effectiveness of its internal
control over financial reporting. Such assessment was based on criteria established in Internal Control—Integrated
Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable
assurance and may not prevent or detect misstatements. Management regularly monitors our internal control over
financial reporting, and actions are taken to correct any deficiencies as they are identified. Based on its assessment,
management has concluded that our internal control over financial reporting is effective as of January 29, 2021.
Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated
financial statements, has issued an attestation report on our internal control over financial reporting. Such attestation
report is contained below.
68
2020 Form 10-K
(c) Attestation Report of Independent Registered Public Accounting Firm.
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
Dollar General Corporation
Opinion on Internal Control over Financial Reporting
We have audited Dollar General Corporation and subsidiaries’ internal control over financial reporting as
of January 29, 2021, based on criteria established in Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In
our opinion, Dollar General Corporation and subsidiaries (the Company) maintained, in all material respects,
effective internal control over financial reporting as of January 29, 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the 2020 consolidated financial statements of the Company and our report dated
March 19, 2021, expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting included in the
accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
2020 Form 10-K
69
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Nashville, Tennessee
March 19, 2021
/s/ Ernst & Young LLP
(d) Changes in Internal Control Over Financial Reporting. There have been no changes during the quarter
ended January 29, 2021 in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)
or Rule 15d-15(f)) that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
ITEM 9B. OTHER INFORMATION
On March 16, 2021, the Company’s Compensation Committee (the “Committee”) approved the Company’s
2021 short-term incentive bonus program applicable to the Company’s named executive officers (“2021
Teamshare”) on the terms and subject to the conditions set forth in the Teamshare Incentive Program document
attached hereto as Exhibit 10.33.
The Committee again selected adjusted EBIT as the Company-wide performance measure for 2021
Teamshare and established the target level of adjusted EBIT consistent with adjusted EBIT in the Company’s fiscal
year 2021 financial plan previously approved by the Board of Directors. The Committee determined that adjusted
EBIT shall mean the Company’s operating profit as calculated in accordance with United States generally accepted
accounting principles, 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 Dollar General Corporation Amended and Restated 2007 Stock
Incentive 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. The Committee established the threshold below which no bonus may be paid under 2021 Teamshare at
85% of the target level of the adjusted EBIT performance measure and the maximum above which no additional
bonus may be paid at 130% of the target level of the adjusted EBIT performance measure. The amount of bonus
paid to named executive officers will vary between 0% and 300% of the target bonus payment amount based on
actual Company performance compared to target performance on a graduated scale, with performance at the target
level resulting in 100% of the target bonus amount being earned, and if a named executive officer is determined to
be eligible to receive a 2021 Teamshare bonus payout in accordance with the eligibility rules, adjustments to bonus
payouts may be made upward or downward based upon individual performance or other factors as determined in the
sole discretion of the Committee. The target percentage of base salary payout for 2021 Teamshare for Mr. Vasos,
Mr. Owen, Mr. Garratt, Ms. R. Taylor and Mr. Wenkoff is 150%, 100%, 75%, 75% and 75%, respectively.
The foregoing description of 2021 Teamshare is a summary only, does not purport to be complete, and is
qualified in its entirety by reference to the filed Teamshare Incentive Program document attached hereto as
Exhibit 10.33.
70
2020 Form 10-K
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
(a) Information Regarding Directors and Executive Officers. The information required by this Item 10
regarding our directors and director nominees is contained under the captions “Who are the nominees this year” and
“Are there any family relationships between any of the directors, executive officers or nominees,” in each case under
the heading “Proposal 1: Election of Directors” in our definitive Proxy Statement to be filed for our Annual Meeting
of Shareholders to be held on May 26, 2021 (the “2021 Proxy Statement”), which information under such captions is
incorporated herein by reference. Information required by this Item 10 regarding our executive officers is contained
in Part I of this Form 10-K under the caption “Information About Our Executive Officers,” which information under
such caption is incorporated herein by reference.
(b) Code of Business Conduct and Ethics. We have adopted a Code of Business Conduct and Ethics that
applies to all of our employees, officers and Board members. This Code is posted on our Internet website at
https://investor.dollargeneral.com. If we choose to no longer post such Code, we will provide a free copy to any
person upon written request to Dollar General Corporation, c/o Investor Relations Department, 100 Mission Ridge,
Goodlettsville, TN 37072. We intend to provide any required disclosure of an amendment to or waiver from such
Code that applies to our principal executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, on our Internet website located at
https://investor.dollargeneral.com promptly following the amendment or waiver. We may elect to disclose any such
amendment or waiver in a report on Form 8-K filed with the SEC either in addition to or in lieu of the website
disclosure. The information contained on or connected to our Internet website is not incorporated by reference into
this Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC.
(c) Procedures for Shareholders to Recommend Director Nominees. There have been no material changes
to the procedures by which security holders may recommend nominees to the registrant’s Board of Directors.
(d) Audit Committee Information. Information required by this Item 10 regarding our audit committee and
our audit committee financial experts is contained under the captions “What other functions are performed by the
Board’s Committees” and “Does an audit committee financial expert serve on the Audit Committee,” in each case
under the heading “Corporate Governance” in the 2021 Proxy Statement, which information pertaining to the audit
committee and its membership and audit committee financial experts under such captions is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 regarding director and executive officer compensation, the
Compensation Committee Report, the risks arising from our compensation policies and practices for employees, pay
ratio disclosure, and compensation committee interlocks and insider participation is contained under the captions
“Director Compensation” and “Executive Compensation” in the 2021 Proxy Statement, which information under
such captions is incorporated herein by reference.
2020 Form 10-K
71
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
(a) Equity Compensation Plan Information. The following table sets forth information about securities
authorized for issuance under our compensation plans (including individual compensation arrangements) as of
January 29, 2021:
Number of
securities remaining
available for future
issuance under
plans (excluding
securities reflected
in column (a))
(c)
Number of securities
to be issued upon
exercise of
Weighted-average equity compensation
exercise price of
Plan category
Equity compensation plans approved by security
outstanding options, outstanding options,
warrants and rights warrants and rights
(a)
(b)
holders(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,786,370 $
104.69
14,363,390
Equity compensation plans not approved by security
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
3,786,370 $
—
104.69
—
14,363,390
(1) Column (a) consists of shares of common stock issuable upon exercise of outstanding options and upon vesting
and payment of outstanding restricted stock units, performance share units and deferred shares, including
dividend equivalents accrued thereon, under the Amended and Restated 2007 Stock Incentive Plan. Restricted
stock units, performance share units, deferred shares and dividend equivalents are settled for shares of common
stock on a one-for-one basis and have no exercise price. Accordingly, they have been excluded for purposes of
computing the weighted-average exercise price in column (b). Column (c) consists of shares remaining
available for future grants pursuant to the Amended and Restated 2007 Stock Incentive Plan, whether in the
form of options, stock appreciation rights, stock, restricted stock, restricted stock units, performance share units
or other stock-based awards.
(b) Other Information. The information required by this Item 12 regarding security ownership of certain
beneficial owners and our management is contained under the caption “Security Ownership” in the 2021 Proxy
Statement, which information under such caption is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by this Item 13 regarding certain relationships and related transactions is
contained under the caption “Transactions with Management and Others” in the 2021 Proxy Statement, which
information under such caption is incorporated herein by reference.
The information required by this Item 13 regarding director independence is contained under the caption
“Director Independence” in the 2021 Proxy Statement, which information under such caption is incorporated herein
by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Item 14 regarding fees we paid to our principal accountant and the pre-
approval policies and procedures established by the Audit Committee of our Board of Directors is contained under
the caption “Fees Paid to Auditors” in the 2021 Proxy Statement, which information under such caption is
incorporated herein by reference.
72
2020 Form 10-K
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
PART IV
(a) Report of Independent Registered Public Accounting Firm
42
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Consolidated Statements of Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(b) All schedules for which provision is made in the applicable accounting regulations of the SEC are not
required under the related instructions, are inapplicable or the information is included in the Consolidated
Financial Statements and, therefore, have been omitted.
(c) Exhibits:
EXHIBIT INDEX
3.1 Amended and Restated Charter of Dollar General Corporation (effective May 27, 2020) (incorporated by
reference to Exhibit 3.1 to Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal
quarter ended May 1, 2020, filed with the SEC on May 28, 2020 (file no. 001-11421))
3.2 Amended and Restated Bylaws of Dollar General Corporation (effective May 27, 2020) (incorporated by
reference to Exhibit 3.2 to Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal
quarter ended May 1, 2020, filed with the SEC on May 28, 2020 (file no. 001-11421))
4.1 Form of 3.250% Senior Notes due 2023 (included in Exhibit 4.8) (incorporated by reference to Exhibit
4.2 to Dollar General Corporation’s Current Report on Form 8-K dated April 8, 2013, filed with the SEC
on April 11, 2013 (file no. 001-11421))
4.2 Form of 4.150% Senior Notes due 2025 (included in Exhibit 4.9) (incorporated by reference to Exhibit
4.1 to Dollar General Corporation’s Current Report on Form 8-K dated October 15, 2015, filed with the
SEC on October 20, 2015 (file no. 001-11421))
4.3 Form of 3.875% Senior Notes due 2027 (included in Exhibit 4.10) (incorporated by reference to Exhibit
4.1 to Dollar General Corporation’s Current Report on Form 8-K dated April 11, 2017, filed with the
SEC on April 11, 2017 (file no. 001-11421))
4.4 Form of 4.125% Senior Notes due 2028 (included in Exhibit 4.11) (incorporated by reference to Exhibit
4.1 to Dollar General Corporation’s Current Report on Form 8-K dated April 10, 2018, filed with the
SEC on April 10, 2018 (file no. 001-11421))
4.5 Form of 3.500% Senior Notes due 2030 (included in Exhibit 4.12) (incorporated by reference to Exhibit
4.1 to Dollar General Corporation’s Current Report on Form 8-K dated April 3, 2020, filed with the SEC
on April 3, 2020 (file no. 001-11421))
4.6 Form of 4.125% Senior Notes due 2050 (included in Exhibit 4.13) (incorporated by reference to Exhibit
4.3 to Dollar General Corporation’s Current Report on Form 8-K dated April 3, 2020, filed with the SEC
on April 3, 2020 (file no. 001-11421))
4.7 Indenture, dated as of July 12, 2012, between Dollar General Corporation, as issuer, and U.S. Bank
National Association, as trustee (incorporated by reference to Exhibit 4.1 to Dollar General Corporation’s
Current Report on Form 8-K dated July 12, 2012, filed with the SEC on July 17, 2012 (file
no. 001-11421))
2020 Form 10-K
73
4.8 Fourth Supplemental Indenture, dated as of April 11, 2013, between Dollar General Corporation, as
issuer, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to Dollar
General Corporation’s Current Report on Form 8-K dated April 8, 2013, filed with the SEC on April 11,
2013 (file no. 001-11421))
4.9 Fifth Supplemental Indenture, dated as of October 20, 2015, between Dollar General Corporation, as
issuer, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Dollar
General Corporation’s Current Report on Form 8-K dated October 15, 2015, filed with the SEC on
October 20, 2015 (file no. 001-11421))
4.10 Sixth Supplemental Indenture, dated as of April 11, 2017, between Dollar General Corporation and U.S.
Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Dollar General
Corporation’s Current Report on Form 8-K dated April 11, 2017, filed with the SEC on April 11, 2017
(file no. 001-11421))
4.11 Seventh Supplemental Indenture, dated as of April 10, 2018, between Dollar General Corporation and
U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Dollar General
Corporation’s Current Report on Form 8-K dated April 10, 2018, filed with the SEC on April 10, 2018
(file no. 001-11421))
4.12 Eighth Supplemental Indenture, dated as of April 3, 2020, between Dollar General Corporation and U.S.
Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Dollar General
Corporation’s Current Report on Form 8-K dated April 3, 2020, filed with the SEC on April 3, 2020 (file
no. 001-11421))
4.13 Ninth Supplemental Indenture, dated as of April 3, 2020, between Dollar General Corporation and U.S.
Bank National Association, as trustee (incorporated by reference to Exhibit 4.3 to Dollar General
Corporation’s Current Report on Form 8-K dated April 3, 2020, filed with the SEC on April 3, 2020 (file
no. 001-11421))
4.14 Amended and Restated Credit Agreement, dated as of September 10, 2019, among Dollar General
Corporation, as borrower, Citibank, N.A., as administrative agent, and the other credit parties and lenders
party thereto (incorporated by reference to Exhibit 4.1 to Dollar General Corporation’s Current Report on
Form 8-K dated September 10, 2019, filed with the SEC on September 13, 2019 (file no. 001-11421))
4.15 Material terms of outstanding securities registered under Section 12 of the Exchange Act of 1934 as
required by Item 202(a)-(d) and (f) of Regulation S-K
10.1 Dollar General Corporation Amended and Restated 2007 Stock Incentive Plan (adopted November 30,
2016 and approved by shareholders on May 31, 2017) (incorporated by reference to Exhibit 10.2 to
Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 28,
2016, filed with the SEC on December 1, 2016 (file no. 001-11421))*
10.2 Form of Stock Option Award Agreement (approved March 20, 2012) for annual awards beginning March
2012 and prior to March 2015 to certain employees of Dollar General Corporation pursuant to the
Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Dollar
General Corporation’s Current Report on Form 8-K dated March 20, 2012, filed with the SEC on
March 26, 2012 (file no. 001-11421))*
10.3 Form of Stock Option Award Agreement (approved August 26, 2014) for annual awards beginning
March 2015 and prior to March 2016 to certain employees of Dollar General Corporation pursuant to the
Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to Dollar
General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2014,
filed with the SEC on December 4, 2014 (file no. 001-11421))*
74
2020 Form 10-K
10.4 Form of Stock Option Award Agreement (approved March 16, 2016) for annual awards beginning March
2016 and prior to March 2017 to certain employees of Dollar General Corporation pursuant to the
Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.5 to Dollar
General Corporation’s Annual Report on Form 10-K for the fiscal year ended January 29, 2016, filed
with the SEC on March 22, 2016 (file no. 001-11421))*
10.5 Form of Stock Option Award Agreement (approved March 22, 2017) for annual awards beginning March
2017 and prior to March 2018 to certain employees of Dollar General Corporation pursuant to the Dollar
General Corporation Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to
Exhibit 10.7 to Dollar General Corporation’s Annual Report on Form 10-K for the fiscal year ended
February 3, 2017, filed with the SEC on March 24, 2017 (file no. 001-11421))*
10.6 Form of Stock Option Award Agreement (approved March 21, 2018) for annual awards beginning March
2018 and prior to March 2021 to certain employees of Dollar General Corporation pursuant to the Dollar
General Corporation Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to
Exhibit 10.7 to Dollar General Corporation’s Annual Report on Form 10-K for the fiscal year ended
February 2, 2018, filed with the SEC on March 23, 2018 (file no. 001-11421))*
10.7 Form of Stock Option Award Agreement (approved March 16, 2021) for annual awards beginning March
2021 to certain employees of Dollar General Corporation pursuant to the Dollar General Corporation
Amended and Restated 2007 Stock Incentive Plan*
10.8 Form of Stock Option Award Agreement (approved August 26, 2014) for awards beginning December
2014 and prior to May 2016 to certain newly hired and promoted employees of Dollar General
Corporation pursuant to the Amended and Restated 2007 Stock Incentive Plan (incorporated by reference
to Exhibit 10.3 to Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter
ended October 31, 2014, filed with the SEC on December 4, 2014 (file no. 001-11421))*
10.9 Form of Stock Option Award Agreement (approved May 24, 2016) for awards beginning May 2016 and
prior to March 2017 to certain newly hired and promoted employees of Dollar General Corporation
pursuant to the Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit
10.3 to Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended April
29, 2016, filed with the SEC on May 26, 2016 (file no. 001-11421))*
10.10 Form of Stock Option Award Agreement (approved March 22, 2017) for awards beginning March 2017
and prior to December 2017 to certain newly hired and promoted employees of Dollar General
Corporation pursuant to the Dollar General Corporation Amended and Restated 2007 Stock Incentive
Plan (incorporated by reference to Exhibit 10.10 to Dollar General Corporation’s Annual Report on Form
10-K for the fiscal year ended February 3, 2017, filed with the SEC on March 24, 2017 (file no. 001-
11421))*
10.11 Form of Stock Option Award Agreement (approved December 5, 2017) for awards beginning December
2017 and prior to March 2021 to certain newly hired and promoted employees of Dollar General
Corporation pursuant to the Dollar General Corporation Amended and Restated 2007 Stock Incentive
Plan (incorporated by reference to Exhibit 10.2 to Dollar General Corporation’s Quarterly Report on
Form 10-Q for the fiscal quarter ended November 3, 2017, filed with the SEC on December 7, 2017 (file
no. 001-11421))*
10.12 Form of Stock Option Award Agreement (approved March 16, 2021) for awards beginning March 2021
to certain newly hired and promoted employees of Dollar General Corporation pursuant to the Dollar
General Corporation Amended and Restated 2007 Stock Incentive Plan*
2020 Form 10-K
75
10.13 Form of Performance Share Unit Award Agreement (approved March 21, 2018) for 2018 awards to
certain employees of Dollar General Corporation pursuant to the Dollar General Corporation Amended
and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.15 to Dollar General
Corporation’s Annual Report on Form 10-K for the fiscal year ended February 2, 2018, filed with the
SEC on March 23, 2018 (file no. 001-11421))*
10.14 Form of Performance Share Unit Award Agreement (approved March 20, 2019) for 2019 awards to
certain employees of Dollar General Corporation pursuant to the Dollar General Corporation Amended
and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.15 to Dollar General
Corporation’s Annual Report on Form 10-K for the fiscal year ended February 1, 2019, filed with the
SEC on March 22, 2019 (file no. 001-11421))*
10.15 Form of Performance Share Unit Award Agreement (approved March 17, 2020) for 2020 awards to
certain employees of Dollar General Corporation pursuant to the Dollar General Corporation Amended
and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.14 to Dollar General
Corporation’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020, filed with the
SEC on March 19, 2020 (file no. 001-11421))*
10.16 Form of Performance Share Unit Award Agreement (approved March 16, 2021) for awards beginning
March 2021 to certain employees of Dollar General Corporation pursuant to the Dollar General
Corporation Amended and Restated 2007 Stock Incentive Plan*
10.17 Form of Restricted Stock Unit Award Agreement (approved March 21, 2018) for awards beginning
March 2018 and prior to March 2021 to certain employees of Dollar General Corporation pursuant to the
Dollar General Corporation Amended and Restated 2007 Stock Incentive Plan (incorporated by reference
to Exhibit 10.19 to Dollar General Corporation’s Annual Report on Form 10-K for the fiscal year ended
February 2, 2018, filed with the SEC on March 23, 2018 (file no. 001-11421))*
10.18 Form of Restricted Stock Unit Award Agreement (approved March 16, 2021) for awards beginning
March 2021 to certain employees of Dollar General Corporation pursuant to the Dollar General
Corporation Amended and Restated 2007 Stock Incentive Plan*
10.19 Form of Restricted Stock Unit Award Agreement for awards prior to May 2011 to non-employee
directors of Dollar General Corporation pursuant to the Amended and Restated 2007 Stock Incentive
Plan (incorporated by reference to Exhibit 10.15 to Dollar General Corporation’s Registration Statement
on Form S-1 (file no. 333-161464))
10.20 Form of Restricted Stock Unit Award Agreement (approved May 24, 2011) for awards beginning May
2011 and prior to May 2014 to non-employee directors of Dollar General Corporation pursuant to the
Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to Dollar
General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 29, 2011, filed
with the SEC on June 1, 2011 (file no. 001-11421))
10.21 Form of Restricted Stock Unit Award Agreement (approved May 28, 2014) for awards beginning
May 2014 and prior to February 2015 to non-employee directors of Dollar General Corporation pursuant
to the Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to
Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2014,
filed with the SEC on June 3, 2014 (file no. 001-11421))
10.22 Form of Restricted Stock Unit Award Agreement (approved December 3, 2014) for awards beginning
February 2015 and prior to May 2016 to non-employee directors of Dollar General Corporation pursuant
to the Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.7 to
Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31,
2014, filed with the SEC on December 4, 2014 (file no. 001-11421))
76
2020 Form 10-K
10.23 Form of Restricted Stock Unit Award Agreement (approved May 24, 2016) for awards beginning May
2016 and prior to May 2017 to non-employee directors of Dollar General Corporation pursuant to the
Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to Dollar
General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 29, 2016, filed
with the SEC on May 26, 2016 (file no. 001-11421))
10.24 Form of Restricted Stock Unit Award Agreement (approved May 30, 2017) for awards beginning May
2017 to non-employee directors of Dollar General Corporation pursuant to the Dollar General
Corporation Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.2
to Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 5,
2017, filed with the SEC on June 1, 2017 (file no. 001-11421))
10.25 Form of Restricted Stock Unit Award Agreement (approved January 26, 2016) for awards beginning
February 1, 2016 and prior to November 28, 2018 to non-executive Chairmen of the Board of Directors
of Dollar General Corporation pursuant to the Amended and Restated 2007 Stock Incentive Plan
(incorporated by reference to Exhibit 10.20 to Dollar General Corporation’s Annual Report on Form
10-K for the fiscal year ended January 29, 2016, filed with the SEC on March 22, 2016 (file no. 001-
11421))
10.26 Form of Restricted Stock Unit Award Agreement (approved November 28, 2018) for awards beginning
after November 28, 2018 to non-executive Chairmen of the Board of Directors of Dollar General
Corporation pursuant to the Dollar General Corporation Amended and Restated 2007 Stock Incentive
Plan (incorporated by reference to Exhibit 10.3 to Dollar General Corporation’s Quarterly Report on
Form 10-Q for the fiscal quarter ended November 2, 2018, filed with the SEC on December 4, 2018 (file
no. 001-11421))
10.27 Form of Stock Option Award Agreement for awards to non-employee directors of Dollar General
Corporation pursuant to the Amended and Restated 2007 Stock Incentive Plan (incorporated by reference
to Exhibit 10.16 to Dollar General Corporation’s Registration Statement on Form S-1 (file
no. 333-161464))
10.28 Dollar General Corporation CDP/SERP Plan (as amended and restated effective December 31, 2007)
(incorporated by reference to Exhibit 10.10 to Dollar General Corporation’s Registration Statement on
Form S-4 (file no. 333-148320))*
10.29 First Amendment to the Dollar General Corporation CDP/SERP Plan (as amended and restated effective
December 31, 2007) (incorporated by reference to Exhibit 10.11 to Dollar General Corporation’s
Registration Statement on Form S-4 (file no. 333-148320))*
10.30 Second Amendment to the Dollar General Corporation CDP/SERP Plan (as amended and restated
effective December 31, 2007), dated as of June 3, 2008 (incorporated by reference to Exhibit 10.6 to
Dollar General Corporation’s Quarterly Report on Form 10-Q for the quarter ended August 1, 2008, filed
with the SEC on September 3, 2008 (file no. 001-11421))*
10.31 Dollar General Corporation Non-Employee Director Deferred Compensation Plan (approved
December 3, 2014) (incorporated by reference to Exhibit 10.6 to Dollar General Corporation’s Quarterly
Report on Form 10-Q for the fiscal quarter ended October 31, 2014, filed with the SEC on December 4,
2014 (file no. 001-11421))
10.32 Dollar General Corporation 2020 Teamshare Incentive Program for Named Executive Officers
(incorporated by reference to Exhibit 10.31 to Dollar General Corporation’s Annual Report on Form
10-K for the fiscal year ended January 31, 2020, filed with the SEC on March 19, 2020 (file no. 001-
11421))*
10.33 Dollar General Corporation Teamshare Incentive Program for Named Executive Officers*
2020 Form 10-K
77
10.34 Summary of Dollar General Corporation Life Insurance Program as Applicable to Executive Officers
(incorporated by reference to Exhibit 10.36 to Dollar General Corporation’s Annual Report on Form
10-K for the fiscal year ended February 2, 2018, filed with the SEC on March 23, 2018 (file no. 001-
11421))*
10.35 Dollar General Corporation Executive Relocation Policy, as amended (effective August 27, 2019)
(incorporated by reference to Exhibit 10.1 to Dollar General Corporation’s Quarterly Report on Form
10-Q for the fiscal quarter ended August 2, 2019, filed with the SEC on August 29, 2019) (file no. 001-
11421))*
10.36 Summary of Non-Employee Director Compensation effective February 1, 2020 (incorporated by
reference to Exhibit 10.4 to Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal
quarter ended November 1, 2019, filed with the SEC on December 5, 2019 (file no. 001-11421))
10.37 Employment Agreement, effective June 3, 2018, between Dollar General Corporation and Todd J. Vasos
(incorporated by reference to Exhibit 99 to Dollar General Corporation’s Current Report on Form 8-K
dated May 31, 2018, filed with the SEC on May 31, 2018 (file no. 001-11421))*
10.38 Form of Stock Option Award Agreement between Dollar General Corporation and Todd J. Vasos for
June 3, 2015 award (incorporated by reference to Exhibit 99.2 to Dollar General Corporation’s Current
Report on Form 8-K dated May 27, 2015, filed with the SEC on May 28, 2015 (file no. 001-11421))*
10.39 Form of Stock Option Award Agreement between Dollar General Corporation and Todd J. Vasos
(approved March 16, 2016) for March 16, 2016 award (incorporated by reference to Exhibit 10.38 to
Dollar General Corporation’s Annual Report on Form 10-K for the fiscal year ended January 29, 2016,
filed with the SEC on March 22, 2016 (file no. 001-11421))*
10.40 Form of Stock Option Award Agreement between Dollar General Corporation and Todd J. Vasos
(approved March 17, 2020) for March 17, 2020 award (incorporated by reference to Exhibit 10.38 to
Dollar General Corporation’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020,
filed with the SEC on March 19, 2020 (file no. 001-11421))*
10.41 Form of Performance Share Unit Award Agreement between Dollar General Corporation and Todd J.
Vasos (approved March 17, 2020) for March 17, 2020 award (incorporated by reference to Exhibit 10.39
to Dollar General Corporation’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020,
filed with the SEC on March 19, 2020 (file no. 001-11421))*
10.42 Form of Stock Option Award Agreement between Dollar General Corporation and Todd J. Vasos
(approved March 16, 2021) for awards beginning March 16, 2021*
10.43 Form of Performance Share Unit Award Agreement between Dollar General Corporation and Todd J.
Vasos (approved March 16, 2021) for awards beginning March 16, 2021*
10.44 Form of Executive Vice President Employment Agreement with attached Schedule of Executive Vice
Presidents who have executed the Executive Vice President Employment Agreement (incorporated by
reference to Exhibit 99 to Dollar General Corporation’s Current Report on Form 8-K dated April 5, 2018,
filed with the SEC on April 11, 2018 (file no. 001-11421))*
10.45 Amended Schedule of Executive Officers who have executed an employment agreement in the form of
Executive Vice President Employment Agreement filed as Exhibit 10.44 (incorporated by reference to
Exhibit 10.1 to Dollar General Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended
October 30, 2020, filed with the SEC on December 3, 2020 (file no. 001-11421))*
10.46 Form of Senior Vice President Employment Agreement with attached Schedule of Senior Vice President-
level Executive Officers who have executed the Senior Vice President Employment Agreement
(incorporated by reference to Exhibit 10.1 to Dollar General Corporation’s Quarterly Report on Form
10-Q for the fiscal quarter ended May 4, 2018, filed with the SEC on May 31, 2018 (file no. 001-
11421))*
78
2020 Form 10-K
10.47 Amended Schedule of Senior Vice President-level Executive Officers who have executed an employment
agreement in the form of Senior Vice President Employment Agreement filed as Exhibit 10.46
(incorporated by reference to Exhibit 10.2 to Dollar General Corporation’s Quarterly Report on Form
10-Q for the fiscal quarter ended October 30, 2020, filed with the SEC on December 3, 2020 (file no.
001-11421))*
10.48 Amendment to Employment Agreement by and between Dollar General Corporation and Jason S. Reiser,
effective September 24, 2020 (incorporated by reference to Exhibit 99.2 to Dollar General Corporation’s
Current Report on Form 8-K dated September 24, 2020, filed with the SEC on September 30, 2020 (file
no. 001-11421))*
21 List of Subsidiaries of Dollar General Corporation
23 Consent of Independent Registered Public Accounting Firm
24 Powers of Attorney (included as part of the signature pages hereto)
31 Certifications of CEO and CFO under Exchange Act Rule 13a-14(a)
32 Certifications of CEO and CFO under 18 U.S.C. 1350
101 Interactive data files for Dollar General Corporation’s Annual Report on Form 10-K for the fiscal year
ended January 29, 2021, formatted in Inline XBRL: (i) the Consolidated Balance Sheets; (ii) the
Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the
Consolidated Statements of Shareholders’ Equity; (v) the Consolidated Statements of Cash Flows; and
(vi) the Notes to Consolidated Financial Statements
104 The cover page from Dollar General Corporation’s Annual Report on Form 10-K for the fiscal year
ended January 29, 2021 (formatted in Inline XBRL and contained in Exhibit 101)
* Management Contract or Compensatory Plan
ITEM 16. FORM 10-K SUMMARY
None
2020 Form 10-K
79
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DOLLAR GENERAL CORPORATION
Date: March 19, 2021
By:
/s/ Todd J. Vasos
Todd J. Vasos,
Chief Executive Officer
We, the undersigned directors and officers of the registrant, hereby severally constitute Todd J. Vasos, John
W. Garratt and Anita C. Elliott, and each of them singly, our true and lawful attorneys with full power to them and
each of them to sign for us, and in our names in the capacities indicated below, any and all amendments to this
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Title
/s/ Todd J. Vasos
TODD J. VASOS
Chief Executive Officer & Director
(Principal Executive Officer)
Date
March 19, 2021
/s/ John W. Garratt
JOHN W. GARRATT
/s/ Anita C. Elliott
ANITA C. ELLIOTT
Executive Vice President & Chief Financial Officer
March 19, 2021
(Principal Financial Officer)
Senior Vice President & Chief Accounting Officer
March 19, 2021
(Principal Accounting Officer)
March 19, 2021
March 19, 2021
March 19, 2021
March 19, 2021
March 19, 2021
March 19, 2021
March 19, 2021
/s/ Warren F. Bryant
WARREN F. BRYANT
Director
/s/ Michael M. Calbert
MICHAEL M. CALBERT
Director
/s/ Patricia D. Fili-Krushel
PATRICIA D. FILI-KRUSHEL
Director
/s/ Timothy I. McGuire
TIMOTHY I. MCGUIRE
Director
/s/ William C. Rhodes, III
WILLIAM C. RHODES, III
Director
/s/ Debra A. Sandler
DEBRA A. SANDLER
/s/ Ralph E. Santana
RALPH E. SANTANA
Director
Director
80
2020 Form 10-K
DIRECTORS
Michael M. Calbert (1)(4)*
Retired Member
KKR & Co. L.P.
Warren F. Bryant (2)(3)
Retired Chairman, President &
Chief Executive Officer
Longs Drug Stores Corporation
Patricia D. Fili-Krushel (3)*(4)
Chairperson
Coqual
Timothy I. McGuire (3)
Chief Executive Officer
Mobile Service Center Canada, Ltd.
(d/b/a Mobile Klinik)
Ralph E. Santana (4)
Executive Vice President &
Chief Marketing Officer
Harman International Industries
William C. Rhodes, III (2)*
Chairman, President &
Chief Executive Officer
AutoZone, Inc.
Todd J. Vasos†
Chief Executive Officer
Dollar General Corporation
Debra A. Sandler (2)(4)
President & Chief Executive Officer
La Grenade Group, LLC
Founder & Chief Executive Officer
Mavis Foods, LLC
(1) Chairman of the Board
(2) Audit Committee
(3) Compensation Committee
(4) Nominating & Governance Committee
(*) Committee Chairperson
SENIOR OFFICERS
Todd J. Vasos†
Chief Executive Officer
Jeffery C. Owen†
Chief Operating Officer
EXECUTIVE VICE PRESIDENTS
John W. Garratt†
Chief Financial Officer
Michael J. Kindy†
Global Supply Chain
Kathleen A. Reardon†
Chief People Officer
SENIOR VICE PRESIDENTS
Steven G. Sunderland†
Store Operations
Carman R. Wenkoff†
Chief Information Officer
Emily C. Taylor†
Chief Merchandising Officer
Rhonda M. Taylor†
General Counsel
Johanna M. Blankush
General Merchandise Manager
Brian T. Hartshorn
General Merchandise Manager
Roderick J. West
Distribution
Steven R. Deckard
Emerging Markets
Kelly M. Dilts
Finance
Connie V. Droge
Store Operations
Tracey N. Herrmann
Channel Innovation
Adam D. Janatsch
Distribution
Daniel J. Nieser
Real Estate & Store Development
Bryan D. Wheeler
General Merchandise Manager
Antonio Zuazo
Inventory & Transportation
† Indicates persons designated as
the Company’s executive officers
Anita C. Elliott†
Chief Accounting Officer
Kalpesh Patel
Store Operations
CORPORATE INFORMATION
TRANSFER AGENT
EQ Shareowner Services
PO Box 64854, St. Paul, MN 55164-0854
www.shareowneronline.com
Inquiries regarding stock transfers, lost certificates or address
changes should be directed to the transfer agent at the
address or website noted above or by calling (866) 927-3314.
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP, Nashville, Tennessee
the fiscal year ended January 29, 2021, which includes as
exhibits the Chief Executive Officer and Chief Financial
Officer Certifications required to be filed with the SEC
pursuant to Section 302 of the Sarbanes-Oxley Act, is
available on our website at www.dollargeneral.com in the
Investor Information section or on the SEC’s website.
A printed copy of the Form 10-K, and a list of all its exhibits,
will be supplied without charge to any shareholder upon
written request. Exhibits to the Form 10-K are available
for a reasonable fee. For a printed copy of the Form 10-K,
please contact:
FORM 10-K; SEC CERTIFICATIONS
A copy of the Form 10-K filed by the Company with the
Securities and Exchange Commission (the “SEC”) for
DOLLAR GENERAL CORPORATION INVESTOR RELATIONS
100 Mission Ridge, Goodlettsville, TN 37072
(615) 855-4000
ABOUT
Dollar General Corporation has been delivering value
to shoppers for more than 80 years. Dollar General
helps shoppers Save time. Save money. Every day.®
by off ering products that are frequently used and
replenished, such as food, snacks, health and beauty
aids, cleaning supplies, basic apparel, housewares and
seasonal items at everyday low prices in convenient
neighborhood locations. Dollar General operated
17,177 stores in 46 states as of January 29, 2021.
In addition to high-quality private brands, Dollar
General sells products from America’s most-trusted
manufacturers such as Clorox, Energizer, Procter &
Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle,
Kimberly-Clark, Kellogg’s, General Mills and PepsiCo.
Visit www.dollargeneral.com
to learn more about Dollar General and shop online.
9
65
21
237
11
5
62
125
100
51
63
178
132
285
216
607
603
602
901
252
479
571
472
611
850
42
38
61
52
21
71
162
49
146
522
823
256
444
909
583
828
960
559
586
1,619
938
ANNUAL MEETING
In light of the continuing health impact of the COVID-19
pandemic, Dollar General Corporation’s annual meeting
of shareholders is scheduled to be held in a virtual only
format at 9 a.m. Central Time on Wednesday, May 26,
2021. To attend the annual meeting, please visit the annual
meeting website at:
www.virtualshareholdermeeting.com/DG2021
Shareholders of record as of March 18, 2021 are entitled to
vote at the meeting. Please see the Proxy Statement for
more information on how to attend and vote at the meeting.
NYSE: DG
The common stock of Dollar General Corporation is
traded on the New York Stock Exchange under the
trading symbol “DG.” The number of shareholders of
record as of March 18, 2021 was 2,756.
STOCK PERFORMANCE GRAPH
The graph below compares Dollar General Corporation’s
cumulative total shareholder return on common stock
with the cumulative total returns of the S&P 500 index
and the S&P Retailing index. The graph tracks the
performance of a $100 investment in our common
stock and in each index (with the reinvestment of all
dividends) from January 29, 2016 to January 29, 2021.
COMPARISON OF CUMULATIVE TOTAL RETURN
$300
$250
$200
$150
$100
1/29/16
2/3/17
2/2/18
2/1/19
1/31/20
1/29/21
Dollar General Corporation
S&P 500 Index
S&P Retailing Index
1/29/16
2/3/17
2/2/18
2/1/19
1/31/20
1/29/21
Dollar General
$100
$98.67
$135.96 $159.08
$214.05
$273.57
S&P 500 Index
$100
$120.04 $151.74
$148.23
$180.37
$211.48
S&P Retailing Index
$100
$120.09
$174.49
$186.29
$219.46
$316.05
NET SALES
NET SALES
(IN BILLIONS)
(IN BILLIONS)
$33.7
$27.8
$25.6
$23.5
$22.0
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
ENDING STORE COUNT
ENDING STORE COUNT
17,177
16,278
15,370
14,534
13,320
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
SAME-STORE
SAME-STORE
SALES GROWTH
SALES GROWTH
16.3%
3.9%
3.2%
2.7%
0.9%
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
CASH FROM OPERATIONS
CASH FROM OPERATIONS
(IN MILLIONS)
(IN MILLIONS)
$3,876
$2,238
$2,144
$1,802
$1,605
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
CAUTIONARY DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS & WEBSITE DISCLAIMER: All forward-looking information in this
report should be read with, and is qualifi ed in its entirety by, the Cautionary Disclosure Regarding Forward-Looking Statements and the Risk Factors
disclosures set forth in the Introduction and in Item 1A, respectively, of the Form 10-K included elsewhere in this report. The information contained on
or connected to our Internet website is not incorporated by reference into this report and should not be considered part of this or any other report
that we fi le with or furnish to the SEC, unless we specifi cally provide otherwise.
The stock price performance included in this graph is not
necessarily indicative of future stock price performance.
Fiscal 2016 includes 53 weeks, while all other
years presented contain 52 weeks. Sales in the 2016
53rd week were approximately $399 million.
D
O
L
L
A
R
G
E
N
E
R
A
L
C
O
R
P
O
R
A
T
I
O
N
•
2
0
2
0
A
N
N
U
A
L
R
E
P
O
R
T
A
N
D
2
0
2
1
P
R
O
X
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S
T
A
T
E
M
E
N
T
</pre>
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