Dollar General 2010 Annual Report Download - page 162

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. 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’’).
Participants are permitted to contribute between 1% and 25% of their pre-tax annual eligible
compensation as defined in the 401(k) plan document, subject to certain limitations under the Internal
Revenue Code. Employees who are over age 50 are permitted to contribute additional amounts on a
pre-tax basis under the catch-up provision of the 401(k) plan subject to Internal Revenue Code
limitations. The Company currently matches employee contributions, 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 over 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 the plan,
ERISA guidelines and Internal Revenue Service regulations. All active participants are fully vested in
all contributions to the 401(k) plan. During 2010, 2009 and 2008, the Company expensed approximately
$9.5 million, $8.4 million and $8.0 million, respectively, for matching contributions.
The Company also has a nonqualified supplemental retirement plan (‘‘SERP’’) and compensation
deferral plan (‘‘CDP’’), known as the Dollar General Corporation CDP/SERP Plan, for a select group
of management and highly compensated employees. The SERP is a noncontributory defined
contribution plan with annual Company contributions ranging from 2% to 10% of base pay plus bonus
depending upon age, years of service and job grade. Under the CDP, 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 CDP accounts. The Company incurred compensation expense for these plans of approximately
$1.7 million, $1.9 million and $1.2 million in 2010, 2009 and 2008, respectively.
The CDP/SERP Plan assets are invested in accounts selected by the Company’s Compensation
Committee or its delegate. Effective August 2, 2008, the deemed fund options under the CDP/SERP
Plan were changed to mirror the same fund options offered under the 401(k) plan which include a
combination of registered mutual funds and a collective trust fund.
Vested amounts are payable at the time designated by the plan upon the participant’s termination
of employment, disability, death 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 CDP account. Account balances are payable in cash.
Asset balances in the fund options that mirror the registered mutual funds are stated at fair value,
which is based on quoted market prices. Asset balances in the collective trust fund are stated at
contract value of the underlying fund assets. These investments are classified as trading securities in the
consolidated balance sheets as further discussed in Note 1. The deferred compensation liability related
to the fund options is recorded at the fair value of the investment options for the registered mutual
funds and at contract value for the collective trust fund. See Note 1 for additional discussion.
84