Dollar General 2007 Annual Report Download - page 165

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of any fees, commissions, adjustments to purchase price, expenses or indemnities in connection
with any sale under the Sale Participation Agreement.
Equity Investment by Senior Management Participants. In connection with the Merger,
certain members of our management (the “Senior Management Participants”) were offered the
opportunity to roll over portions of their equity and/or options and to purchase additional equity
of Dollar General. In connection with such investment and the Merger, we adopted a new stock
incentive plan pursuant to which these individuals were granted new options with respect to
additional shares of our common stock. Messrs. Beré, Tehle, Buley and Gibson and Mss. Guion,
Lanigan, Lowe and Elliott each invested a total of $2,249,995.00, $799,996.25, $754,863.75,
$348,703.75, $650,007.50, $516,026.25, $526,650.00 and $249,997.50, respectively. Any
shares purchased or otherwise acquired by these Senior Management Participants as described
above (including any shares subject to roll over options or acquired upon exercise thereof) are
subject to certain transfer limitations and repurchase rights by Dollar General. We also offered
other employees a similar investment opportunity to participate in our common equity.
Pre-Merger Equity. Prior to the Merger, we maintained various share-based
compensation programs which included options, restricted stock and restricted stock units
(“RSUs”). In connection with the Merger, the outstanding stock options, restricted stock and
RSUs became fully vested and were settled in cash, canceled or, in limited circumstances,
exchanged for new options to purchase our common stock, as described below. Unless
exchanged for new options, each option holder received an amount in cash, without interest and
less applicable withholding taxes, equal to $22 per share (the “Merger Consideration”), less the
exercise price of each option. Additionally, each restricted stock and RSU holder received the
Merger Consideration in cash, without interest and less applicable withholding taxes. Certain
members of our management exchanged existing stock options for new options to purchase our
common stock. The exercise price of, and the number of shares underlying, the roll over options
were adjusted as a result of the Merger. The roll over options otherwise continue under the terms
of the equity plans under which they were issued.
Compensation Deferral Plan (“CDP”) and Supplemental Executive Retirement Plan
(“SERP”). The CDP, in which the executive officers are eligible to participate, and the
associated grantor trust agreement require that the full amount of the benefits due under the CDP
be funded in the grantor trust within 30 days of a change in control of Dollar General, payable in
accordance with the terms of the CDP and trust. The Merger was a change in control for this
purpose. Messrs. Beré, Tehle, Buley and Gibson and Mss. Guion, Lanigan, Lowe and Elliott had
benefits under the CDP having approximate values as of July 6, 2007 of $37,297.42,
$143,419.06, $100,425.31, $58,071.55, $140,542.64, $45,312.57, $73,370.05 and $173,186.85,
respectively.
The SERP, in which the executive officers participate, provides that benefits will become
immediately vested upon a change in control of Dollar General. The associated grantor trust
agreement requires the full amount of the benefits due under the SERP to be funded in the
grantor trust within 30 days of a change in control, payable in accordance with the terms of the
SERP and the trust. The Merger was a change in control for this purpose. Mr. Tehle and
Mss. Guion and Lowe were already vested in benefits under the SERP having approximate