This excerpt taken from the DKS DEF 14A filed May 3, 2007.
Dicks Sporting Goods Supplemental Smart Savings Plans
On July 1, 2006, the Companys Supplemental Smart Savings Plan became effective, which allows certain members of management to annually defer a portion of their existing compensation. We implemented the Supplemental Smart Savings Plan because certain members of management had historically been restricted in their ability to participate in the Companys existing 401(k) Plan because of qualified plan testing rules.
Under the Supplemental Smart Savings Plan, as amended, we give eligible employees the opportunity to enter into agreements to defer up to 15% of their compensation (defined as base salary, quarterly bonus compensation and annual incentive bonus payments) up to a maximum of $12,000 for calendar year 2007. Employees may elect to receive distributions from the Supplemental Smart Savings Plan on the earlier of (i) a specific date which occurs no earlier than the second plan year following the plan year in which deferrals designated for distribution were credited or the date the employees employment is terminated for any reason, or (ii) the date the employees employment is terminated for any reason. The form of distribution may be, at the employees election, paid in a single lump sum
payment, or monthly, quarterly, semi-annual or annual installments, with any installment term between two (2) and fifteen (15) years.
Once the deferral has been made, deferred amounts are recorded in accounts maintained by the Company. The Companys Executive Benefits Committee is responsible for administration of the plan, subject to Rule 303A.05 of the New York Stock Exchange Listed Company Manual and the Companys Compensation Committee Charter. The Company has the ability to match amounts deposited into plan accounts, up to a discretionary percentage of compensation determined annually by the Company, not to exceed 7% of a participants compensation, and less any matching amounts contributed through the Companys 401(k) Plan. We have established a rabbi grantor trust, with a third party trust company as trustee, for the purpose of providing the Company with funds for the payment of matching amounts under the Supplemental Smart Savings Plan.
The Supplemental Smart Savings Plan is intended to constitute a non-qualified, unfunded plan for federal tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended and is also intended to comply with Internal Revenue Code Section 409A, and contains restrictions to help ensure compliance. Our obligations to pay deferred compensation under the Supplemental Smart Savings Plan are unsecured general obligations of the Company. We may amend or terminate the Supplemental Smart Savings Plan at any time in whole or in part; provided that no amendment or termination may reduce the amount credited to accounts at the time of such amendment or termination.
The Supplemental Smart Savings Plan was amended on December 7, 2006, to provide that all executive officers were ineligible to participate in the Supplement Smart Savings Plan after December 31, 2006. As a result of the amendment, in March of 2007 our Compensation Committee approved the implementation of the Dicks Sporting Goods Officers Supplemental Savings Plan, which allows certain key executives, including our named executive officers, the opportunity to defer under it up to 25% of their base salary and up to 100% of their annual bonus under the plan, to be allocated among a range of investment choices. For additional discussion of the terms of the Officers Plan, see Compensation Discussion and Analysis on page 19 of this proxy statement.