Summary
This Form 8-K filing from Dollar General Corporation, dated January 25, 2006, announces a material definitive agreement concerning a Supplemental Executive Retirement Plan (SERP) for CEO David A. Perdue. The SERP was amended to comply with Section 409A of the Internal Revenue Code and to establish a grantor trust for funding purposes. While the details of the SERP itself are not fully disclosed in the 8-K, the filing indicates actions taken by the independent directors of the Board to approve these changes.
Key Highlights
- 1Dollar General Corporation filed a Form 8-K on January 25, 2006.
- 2The filing relates to a material definitive agreement.
- 3The agreement involves the Supplemental Executive Retirement Plan (SERP) for David A. Perdue.
- 4The SERP was amended and restated, effective January 1, 2005.
- 5Key amendments were made to comply with Section 409A of the Internal Revenue Code.
- 6A grantor trust was created to fund the Company's obligations under the SERP.
- 7The independent directors of the Board of Directors approved the SERP amendments.
Frequently Asked Questions
The main purpose of this 8-K filing is to report that Dollar General Corporation's independent directors approved amendments to the Supplemental Executive Retirement Plan (SERP) for CEO David A. Perdue. These amendments were made to comply with new tax regulations (Section 409A of the Internal Revenue Code) and to establish a trust for funding the plan.
Based on the filing, David A. Perdue is an executive of Dollar General Corporation, and the Supplemental Executive Retirement Plan discussed in the filing is specifically for him. He was likely the CEO or a very senior executive at the time of this filing.
A SERP is a non-qualified deferred compensation plan that provides additional retirement benefits to key executives, often supplementing benefits provided by qualified retirement plans (like 401(k)s) which have contribution limits. These plans are typically funded by the employer.
Section 409A of the Internal Revenue Code, enacted to govern non-qualified deferred compensation, imposed strict rules on the timing of deferral elections, distributions, and funding of such plans. Amendments were necessary to ensure the SERP's compliance with these complex regulations and to avoid adverse tax consequences (like immediate taxation and penalties) for the executive.