Dollar General 2012 Annual Report Download - page 30

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investors. See the description of the registration rights agreement under ‘‘Relationships with the
Investors’’ below. During 2010, we amended these rights to allow for their accumulation by any
employee entitled, but who elects not, to exercise such rights in a given offering. The Senior
Management Shareholders waived their piggyback registration rights arising from our initial public
offering in 2009 in consideration of our releasing them from the transfer restrictions contained in the
Management Stockholder’s Agreements after the expiration of a 180-day restricted period with respect
to a number of shares of our common stock equal to the number of shares that such Senior
Management Shareholders could have required us to register in connection with our initial public
offering.
See ‘‘Director Independence’’ for a discussion of a familial relationship between Ms. Cochran
and one of our non-executive officers and compensation paid to that officer during 2012 and 2013.
Interlocks. Mr. Dreiling serves as a manager of Buck Holdings, LLC for which
Messrs. Calbert, Agrawal and Jones (each of whom served on our CNG Committee for all or part of
2012) serve as managers.
Relationships with the Investors. In connection with our initial public offering in 2009, we
entered into a shareholders’ agreement with affiliates of each of KKR and Goldman, Sachs & Co.
Among its other terms, the shareholders’ agreement establishes certain rights with respect to our
corporate governance, including the designation of directors. For additional information regarding those
rights, see ‘‘How are directors identified and nominated’’ elsewhere in this document.
In July 2007, we and Buck Holdings, L.P. entered into an indemnification agreement with KKR
and Goldman, Sachs & Co. pursuant to which we agreed to provide customary indemnification to such
parties and their affiliates in connection with certain claims and liabilities incurred in connection with
certain transactions involving such parties, including the financing for our 2007 merger and pursuant to
services provided under our sponsor advisory agreement with such parties that was entered into in 2007
and terminated in 2009.
In connection with our 2007 merger, we entered into a registration rights agreement with Buck
Holdings, L.P., Buck Holdings, LLC, KKR and Goldman, Sachs & Co. (and certain of their affiliated
investment funds), among certain other parties. Pursuant to this agreement, investment funds affiliated
with KKR have an unlimited number of demand registration rights and investment funds affiliated with
Goldman, Sachs & Co. have two demand registration rights which can be exercised once a year.
Pursuant to such demand registration rights, we are required to register with the SEC the shares of
common stock beneficially owned by them through Buck Holdings L.P. for sale by them to the public,
provided that each of them hold at least $100 million in registrable securities and such registration is
reasonably expected to result in aggregate gross proceeds of $50 million. We are not obligated to file a
registration statement relating to any request to register shares pursuant to such demand registration
rights without KKR’s consent within a period of 180 days after the effective date of any other
registration statement we file pursuant to such demand registration rights. In addition, in the event that
we are registering additional shares of common stock for sale to the public, whether on behalf of us or
the investment funds as described above, we must give notice of such registration to all parties to the
registration rights agreement, including the Senior Management Shareholders, and such persons have
piggyback registration rights providing them the right to have us include the shares of common stock
owned by them in any such registration. In each such event, we are required to pay the registration
expenses.
Pursuant to this registration rights agreement and the demand registration rights thereunder,
secondary offerings of our common stock were completed in April, June and October 2012 and April
2013 for which affiliates of KKR and of Goldman, Sachs & Co. served as underwriters. Dollar General
did not sell shares of common stock, receive proceeds, or pay any underwriting fees in connection with
any of these secondary offerings, but paid resulting aggregate expenses of approximately $1.4 million in
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