Dollar General 2013 Annual Report Download - page 163

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Share-based payments (Continued)
Plan provides for the granting of equity appreciation rights to nonexecutive managerial employees.
During 2011, 818,847 equity appreciation rights were granted, 768,561 of such rights vested, primarily in
conjunction with the Company’s December 2011 stock offering and 50,286 of such rights were
cancelled. No such rights are outstanding as of January 31, 2014.
The fair value method of accounting for share-based awards resulted in share-based compensation
expense (a component of SG&A expenses) and a corresponding reduction in net income before income
taxes as follows:
Equity
Stock Performance Restricted Appreciation
(In thousands) Options Share Units Stock Units Rights Total
Year ended January 31, 2014
Pre-tax ........................... $ 7,634 $3,448 $9,879 $ — $20,961
Net of tax ........................ $ 4,649 $2,100 $6,016 $ — $12,765
Year ended February 1, 2013
Pre-tax ........................... $14,078 $4,082 $3,504 $ — $21,664
Net of tax ........................ $ 8,578 $2,487 $2,135 $ — $13,200
Year ended February 3, 2012
Pre-tax ........................... $15,121 $ — $ 129 $8,731 $23,981
Net of tax ........................ $ 9,208 $ — $ 79 $5,317 $14,604
11. Related party transactions
From time to time the Company has conducted business with entities deemed to be related parties
under U.S. GAAP, including Kohlberg Kravis Roberts & Co. L.P. or ‘‘KKR’’ and Goldman,
Sachs & Co. For purposes of this disclosure, reference to these entities includes their respective
affiliates. In recent years, KKR and Goldman Sachs & Co. owned a significant percentage of the
Company’s common stock, and collectively held three seats on the Company’s Board of Directors. As
of January 31, 2014, KKR and Goldman, Sachs & Co. have liquidated their investment in the
Company’s common stock and no one directly employed by either KKR or Goldman, Sachs & Co.
remained on the Company’s Board of Directors.
KKR and Goldman, Sachs & Co. served in various capacities related to the amendments and
refinancing of the Company’s debt discussed in further detail in Note 5. In connection with these
efforts in 2013 and 2012, the Company paid KKR fees of $0.7 million and $1.6 million, respectively,
and paid Goldman, Sachs & Co. fees of $2.2 million and $1.7 million, respectively.
KKR and Goldman, Sachs & Co. served as underwriters in connection with multiple secondary
offerings of the Company’s common stock held by certain existing shareholders that were executed at
various dates in 2013, 2012 and 2011. The Company did not sell shares of common stock, receive
proceeds from such shareholders’ sales of shares of common stock or pay any underwriting fees in
connection with any of the secondary offerings. Certain members of the Company’s management
exercised registration rights in connection with such offerings.
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