Dollar General 2006 Annual Report Download - page 79

not recognized, in accordance with the provisions of EITF 97-14. The deferred compensation
liability related to the Mutual Funds Option is recorded at the fair value of the investments held
in the trust. The current portion of these balances is included in Accrued expenses and other and
the long term portion is included in Other liabilities in the consolidated balance sheets.
The Company sponsors a supplemental executive retirement plan for the Chief Executive
Officer (called the Supplemental Executive Retirement Plan for David A. Perdue) and accounts
for the plan in accordance with SFAS 158. The plan has an unfunded liability balance of $2.9
million as of February 2, 2007, included in Other liabilities in the consolidated balance sheet as
of February 2, 2007. This balance includes a $0.6 million transition adjustment ($0.4 million net
of tax) for net actuarial losses recorded in 2006 as prescribed by SFAS 158, with the net of tax
offset to Accumulated other comprehensive income. The Company has not included additional
disclosures due to the plan’ s immateriality to the consolidated financial statements as a whole.
Effective January 25, 2006, the Board approved the restatement of the plan to clarify certain
provisions, comply with pending federal legislation and establish a grantor trust to hold certain
assets in connection with the plan. The grantor trust provides for assets to be placed in the trust
upon an actual or potential change in control (as defined in the grantor trust). The assets of the
grantor trust are subject to the claims of the Company’ s creditors.
Non-employee directors may defer all or a part of any fees normally paid by the
Company to a voluntary nonqualified compensation deferral plan. The compensation eligible for
deferral includes the annual retainer, meeting and other fees, as well as any per diem
compensation for special assignments, earned by a director for his or her service to the
Company’ s Board of Directors or one of its committees. The deferred compensation is credited
to a liability account, which is then invested at the option of the director, in deemed investments
which mirror either the Mutual Funds Option or the Common Stock Option and the deferred
compensation will be paid in accordance with the director’ s election in a lump sum or in monthly
installments over a 5, 10 or 15 year period, or a combination of both, at the time designated by
the plan upon a director’ s resignation or termination from the Board. However, a director may
request to receive an “unforeseeable emergency hardship” in-service distribution of amounts
credited to his account in accordance with the terms of the directors’ deferral plan. All deferred
compensation will be immediately due and payable upon a “change in control” (as defined in the
directors’ deferral plan) of the Company. Account balances deemed to be invested in the Mutual
Funds Option are payable in cash and account balances deemed to be invested in the Common
Stock Option are payable in shares of Dollar General common stock and cash in lieu of fractional
shares.
10. Share-based payments
The Company has a shareholder-approved stock incentive plan under which stock
options, nonvested shares in the form of restricted stock and restricted stock units (which
represent the right to receive one share of common stock for each unit upon vesting), and other
equity-based awards may be granted to certain officers, directors and key employees. The plan
authorizes the issuance of up to 29.375 million shares of the Company’s common stock, up to 4
million of which may be issued in the form of restricted stock or restricted stock units. As of
February 2, 2007, there were approximately 6.4 million shares available for future grant,
approximately 3.0 million of which may be issued as restricted stock or restricted stock units.
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