Dollar General 2007 Annual Report Download - page 164

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In the event that a management stockholder wishes to sell his or her stock at any time
after July 6, 2012 but before the earlier of a “Change in Control” (as defined in the Management
Stockholder’ s Agreement) or the consummation of a “Qualified Public Offering” (as defined in
the Management Stockholder’ s Agreement), the Management Stockholder’ s Agreement provides
us with a right of first refusal on those shares on the same terms and conditions that the
management stockholder proposes to sell them to a third party. In the event that a registration
statement is filed with respect to our common stock in the future, the Management Stockholder’ s
Agreement prohibits management stockholders from selling shares not included in the
registration statement from the time of receipt of notice that we have filed or intend to file such
registration statement until 180 days (in the case of an initial public offering) or 90 days (in the
case of any other public offering) of the effective date of the registration statement. The
Management Stockholder’ s Agreement also provides for the management stockholder’ s ability to
cause us to repurchase his outstanding stock and vested options (and vested restricted stock, with
respect to Mr. Dreiling) in the event of the management stockholder’ s death or disability, and for
our ability to cause the management stockholder to sell his stock or options back to us upon
certain termination events. Mr. Dreiling also has the ability to cause us to repurchase his vested
restricted stock, if any, if he resigns for any reason within six months after January 21, 2008. In
addition, under the terms of the Management Stockholder’ s Agreement, each Senior
Management Stockholder (as defined below) has the ability to cause us to repurchase, prior to
the later of (x) July 6, 2008 and (y) the last day of the six-month period after Mr. Dreiling was
hired, all of the shares of common stock and all of the options they rolled over in connection
with the Merger that such Management Stockholder then holds if such Management Stockholder
resigns or is terminated within such time frame.
Following the initial public offering of our common stock, certain members of senior
management, including the executive officers (the “Senior Management Stockholders”), will
have limited “piggyback” registration rights with respect to their shares in the event that certain
of the Investors are selling, or causing to be sold, shares of common stock in such offering.
Sale Participation Agreement. Each Management Participant, including Mr. Dreiling,
also has entered into a Sale Participation Agreement with Parent. The Sale Participation
Agreement grants the Senior Management Stockholders the right to participate in any private
sale of shares of common stock by Parent or its affiliates (the “Tag-Along Right”) and requires
all management stockholders to participate in the private sale, if Parent elects, in the event that
Parent or its affiliates are proposing to sell at least 50% of the outstanding shares of common
stock held by it (the “Drag-Along Right”). The number of shares a management stockholder
would be permitted or required, as applicable, to sell pursuant to the exercise of the Tag-Along
Right or the Drag-Along Right is equal to the number of shares then owned by the management
stockholder and his or her affiliates plus all shares that person is entitled to acquire under
unexercised options (to the extent exercisable at that time or as a result of the consummation of
the proposed sale and also, with respect to Drag-Along Rights pertaining to Mr. Dreiling,
unvested shares of restricted stock that would vest upon consummation of the transaction),
multiplied by a fraction (x) the numerator of which is the aggregate number of shares Parent
proposes to transfer in the proposed sale and (y) the denominator of which is the total number of
shares Parent directly or indirectly owns. Management stockholders will bear the pro rata share