Dollar General 2010 Annual Report Download - page 55

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Pursuant to the CDP, named executive officers may annually elect to defer up to 65% of base
salary if their compensation is in excess of the Internal Revenue Service limit set forth in
Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the ‘‘Internal Revenue Code’’),
and up to 100% of bonus pay if their compensation equals or exceeds the Internal Revenue Service
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
all 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 all 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. Persons hired
after May 27, 2008 (the ‘‘Eligibility Freeze Date’’), including Mr. Ravener, are not eligible to
participate in the SERP. The contribution percentage is based on age, years of service and job grade.
The fiscal 2010 contribution percentage for each eligible named executive officer was 7.5% for
Mr. Dreiling, Ms. Guion and Mr. Flanigan and 9.5% for Mr. Tehle.
As a result of our 2007 merger, which constituted a change-in-control under the CDP/SERP
Plan, all previously unvested SERP amounts vested on July 6, 2007. For newly eligible SERP
participants after July 6, 2007 but prior to the Eligibility Freeze Date, SERP amounts 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’’, or 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. See ‘‘Potential Payments upon
Termination or Change in Control as of January 28, 2011—Payments After a Change in Control’’ below
for a general description of our change in control arrangements.
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. Beginning on August 2, 2008, these
funds are identical to the funds offered in our 401(k) Plan.
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 $25,000 may elect for that account
balance to be paid in cash by (a) lump sum, (b) monthly installments over a 5, 10 or 15-year period or
(c) a combination of lump sum and installments. Otherwise, payment is made in a lump sum. The
vested amount will be payable at the time designated by the Plan upon the participant’s termination of
employment. A participant’s CDP/SERP 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. As a result of our 2007 merger, 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.
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