Dollar General 2010 Annual Report Download - page 29

Proxy
Were there any related-party transactions in 2010 or are any planned for 2011?
We describe below the transactions that have occurred since the beginning of 2010, and any
currently proposed transactions, that involve Dollar General and exceed $120,000, and in which a
related party had or has a direct or indirect material interest.
Relationships with Management. Simultaneously with the closing of our 2007 merger and,
thereafter, in connection with our offering equity awards to our employees under our 2007 Stock
Incentive Plan, we, Buck Holdings L.P. and our employees who hold shares of common stock, or who
were granted options to acquire shares of common stock or who were granted shares of restricted
common stock, of Dollar General (collectively, ‘‘management shareholders’’) entered into shareholder’s
agreements (each, a ‘‘Management Stockholder’s Agreement’’). The Management Stockholder’s
Agreement imposes significant restrictions on transfer of shares of our common stock held by
management shareholders that are subject to the agreement. Generally, shares will be nontransferable
by any means at any time prior to the fifth anniversary of either the closing date of our July 6, 2007
merger or a later specified date (depending upon the terms of the Management Stockholder’s
Agreement), except (i) sales pursuant to an effective registration statement filed by us under the
Securities Act of 1933 (the ‘‘Securities Act’’) in accordance with the Management Stockholder’s
Agreement, (ii) a sale to certain permitted transferees, or (iii) as otherwise permitted by our Board of
Directors or pursuant to a waiver of the restrictions on transfers; provided, that, in the event KKR or
its affiliates transfer limited partnership units owned by them to a third party, such transfer restrictions
shall lapse with respect to the same proportion of shares of common stock owned by a management
shareholder as the proportion of limited partnership units transferred by KKR and such affiliates
relative to the aggregate number of limited partnership units owned by them prior to such transfer.
Following our initial public offering in November 2009, we amended the Management Stockholder’s
Agreements so that shares acquired in the open market or through the directed share program
administered as part of the initial public offering are not subject to the transfer restrictions of the
Management Stockholder’s Agreement. However, shares acquired by executive officers in the open
market or through the directed share program will still be subject to any lock-up arrangements with the
underwriters of any public offering of shares.
In the event that a registration statement is filed with respect to our common stock, the
Management Stockholder’s Agreement prohibits management shareholders 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 shareholder’s ability to cause
us to repurchase his outstanding stock and vested options (and vested restricted stock, with respect to
Mr. Dreiling) subject to the Management Stockholder’s Agreement in the event of the management
shareholder’s death or disability, and for our ability to cause the management shareholder to sell his
stock or options subject to the Management Stockholder’s Agreement back to us upon certain
termination events.
Certain members of senior management, including the executive officers (the ‘‘Senior
Management Shareholders’’), will have limited ‘‘piggyback’’ registration rights with respect to their
shares of our common stock in the event that certain investors sell, or cause to be sold, shares of our
common stock in a public offering. Such rights may be voluntarily extended to other members of
management as determined by our Board in connection with any given future such sale by certain
investors. See the description of the registration rights agreement under ‘‘Relationships with the
Investors’’ below. During 2010, we amended these rights to allow for the accumulation of such rights by
any employee entitled to exercise, but who elects not to so exercise, such rights in a given offering. In
connection with our initial public offering in November 2009, the Senior Management Shareholders
agreed to waive their piggyback registration rights arising from that offering in consideration of our
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