Dollar General 2007 Annual Report Download - page 93

91
including catch-up contributions, at a rate of 100% of employee contributions, up to 5% of
annual eligible salary, after an employee has been employed for one year and has completed a
minimum of 1,000 hours of service.
A participant’ s right to claim a distribution of his or her account balance is dependent on
ERISA guidelines and Internal Revenue Service regulations. All active employees are fully
vested in all contributions to the 401(k) plan. During the 2007 Successor and Predecessor
periods, 2006 and 2005, the Company expensed approximately $3.0 million, $4.3 million, $6.4
million, and $5.8 million, respectively, for matching contributions. The Merger did not
significantly impact the comparability of such expense amounts between periods.
The Company also has a nonqualified supplemental retirement plan and compensation
deferral plan (called the Dollar General Corporation CDP/SERP Plan) for a select group of
management and highly compensated employees. The supplemental retirement plan is a
noncontributory defined contribution plan with annual Company contributions ranging from 2%
to 12% of base pay plus bonus depending upon age plus years of service and job grade. Under
the compensation deferral plan, participants may defer up to 65% of base pay and up to 100% of
bonus pay. An employee may be designated for participation in one or both of the plans,
according to the eligibility requirements of the plans. The Company matches base pay deferrals
at a rate of 100% of base pay deferral, up to 5% of annual salary, with annual salary offset by the
amount of match-eligible salary in the 401(k) plan. All participants are 100% vested in their
compensation deferral plan accounts.
As a result of the Merger which constituted a “change in control” under the CDP/SERP
Plan, all previously unvested amounts under the supplemental retirement plan vested on July 6,
2007. For newly eligible SERP participants after July 6, 2007, the supplemental retirement plan
accounts vest at the earlier of the participant’ s attainment of age 50 or the participant’ s being
credited with 10 or more “years of service”, upon termination of employment due to death or
“total and permanent disability” or upon a “change in control”, all as defined in the CDP/SERP
Plan. The Company incurred compensation expense for these plans of approximately $0.3
million in the 2007 Successor period, $0.5 million in the 2007 Predecessor period, $0.8 million
in 2006 and $0.6 million in 2005.
The supplemental retirement plan and compensation deferral plan assets are invested at
the option of the participant in an account that mirrors the performance of a fund or funds
selected by the Company’ s Compensation Committee or its delegate (the “Mutual Fund
Options”) or, prior to the Merger, in an account that mirrored the performance of the Company’ s
common stock (the “Common Stock Option”). A participant’ s compensation deferral plan and
supplemental retirement plan account balances will be paid in accordance with the participant’ s
election by (a) lump sum, (b) monthly installments over a 5, 10 or 15 year period or (c) a
combination of lump sum and installments. The vested amount will be payable at the time
designated by the plan upon the participant’ s termination of employment or retirement, except
that participants may elect to receive an in-service distribution or an “unforeseeable emergency
hardship” distribution of vested amounts credited to the compensation deferral account. Account
balances deemed to be invested in the Mutual Fund Options are payable in cash and, prior to the