Perdue's contract now continues to March 31, 2008; it had been scheduled to expire on March 31, 2007.
In addition to the extension of the contract, the discount retailer increased Perdue's base salary by $100,000 and granted him 365,000 restricted stock units that are scheduled to vest ratably over a three-year period.
In making the announcement, Gordon Gee, Chairman of the Company's Compensation Committee of the Board of Directors, said, "We are pleased to be able to demonstrate our confidence in David and his efforts to position Dollar General for the future by extending his contract beyond its original term," said Gordan Gee, chairman of the board's compensation committee, in a press release late Tuesday.
Perdue has served as CEO since April 2, 2003 and as chairman since June 2, 2003.
Shares of Dollar General closed Tuesday up 18 cents to $14.44.