Dollar General 2011 Annual Report Download - page 50

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Pursuant to the CDP, each named executive officer may annually elect to defer up to 65% of
base salary if his or her compensation is in excess of the limit set forth in Section 401(a)(17) of the
Internal Revenue Code, and up to 100% of 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
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. Vasos, are not eligible to participate
in the SERP. The contribution percentage is based on age, years of service and job grade. The
fiscal 2011 contribution percentage for each eligible named executive officer was 9.5% for Mr. Dreiling
and Mr. Tehle, 7.5% for Ms. Guion, and 4.5% for Ms. Lanigan.
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 February 3, 2012—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 CNG 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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