Dollar General 2013 Annual Report Download - page 33

What related-party transactions existed in 2013 or are planned for 2014?
We describe below the transactions that have occurred since the beginning of 2013, 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. We also describe below select other
relationships in which a related party has an interest that may not be material.
Related Party Transactions. 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 established certain rights with respect to our corporate
governance, including the designation of directors. The shareholders’ agreement effectively terminated
after Buck Holdings, L.P. sold its remaining shareholdings in Dollar General in December 2013.
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 had an unlimited number of demand registration rights and investment funds affiliated with
Goldman, Sachs & Co. had two demand registration rights which could be exercised once a year.
Pursuant to such demand registration rights, we were 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 held at least $100 million in registrable securities and such registration
would reasonably be expected to result in aggregate gross proceeds of $50 million. In addition, in the
event that we registered additional shares of common stock for sale to the public, whether on behalf of
us or the investment funds as described above, we were required to give notice of such registration to
all parties to the registration rights agreement, including our executive officers other than
Messrs. Sparks and D’Arezzo, and such persons had 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 were required to pay the registration expenses. Such demand and piggyback registration
rights have expired as a result of the sale by Buck Holdings, L.P. of its remaining shareholdings in
Dollar General in December 2013.
Pursuant to this registration rights agreement and the demand registration rights thereunder, a
secondary offering of our common stock was completed in 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 the secondary offering, but paid
resulting expenses of approximately $0.5 million. Certain members of our management, including
certain of our executive officers, exercised piggyback registration rights in connection with such
offering. The underwriters, including affiliates of KKR and Goldman, Sachs & Co., waived their fee for
members of our management who participated in the offering.
Affiliates of KKR were and Goldman, Sachs & Co. may have been lenders under our senior
secured term loan facility, as amended, which had a $2.3 billion principal amount at inception and a
principal balance as of January 31, 2014 of $0. This term loan facility was entered into and
subsequently amended in the ordinary course of business and, as of the loan origination and
subsequent amendments, was made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable loans with persons not related to the lender
and did not involve more than the normal risk of collectability or present other unfavorable features.
We paid approximately $11.3 million of interest on the term loan facility during fiscal 2013, including
approximately $0.5 million to affiliates of KKR and less than $120,000 to affiliates of Goldman,
Sachs & Co.
An affiliate of Goldman, Sachs & Co. (among other entities) served as lender and as
documentation agent and joint lead arranger under our senior secured asset-based revolving credit
facility, as amended. This facility, as amended, had a maximum total commitment of $1.2 billion and
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