Dollar General 2006 Annual Report Download - page 19
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will be completed, and a failure to complete the merger could result in a decline in the market
price of our common stock. Consummation of the merger is subject to the following risks:
• the occurrence of any event, change or other circumstances that could give rise to a
termination of the merger agreement;
• the outcome of any legal proceedings that have been or may be instituted against us,
members of our Board of Directors and others relating to the merger agreement,
including the terms of any settlement of such legal proceedings that may be subject to
court approval;
• the inability to complete the merger due to the failure to obtain shareholder approval
or the failure to satisfy other conditions to consummation of the merger;
• the failure by KKR or its affiliates to obtain the necessary debt financing
arrangements set forth in the commitment letter received in connection with the
merger; and
• the failure of the merger to close for any other reason.
In addition, in connection with the merger we will be subject to several risks, including
the following:
• there may be substantial disruption to our business and a distraction of our
management and employees from day-to-day operations, because matters related to
the merger may require substantial commitments of their time and resources;
• uncertainty about the effect of the merger may adversely affect our credit rating and
our relationships with our employees, suppliers and other persons with whom we
have business relationships;
• certain costs relating to the merger, such as legal, accounting and financial advisory
fees, are payable by us whether or not the merger is completed; and
• under certain circumstances, if the merger is not completed we may be required to
pay the buyer a termination fee of up to $225 million.
Provisions in our charter, Tennessee law and our shareholder rights plan may
discourage potential acquirors of our company, which could adversely affect the value of our
securities. Our charter contains provisions that may have the effect of making it more difficult
for a third party to acquire or attempt to acquire control of our company. In addition, we are
subject to certain provisions of Tennessee law that limit, in some cases, our ability to engage in
certain business combinations with significant shareholders. Also, our shareholder rights plan
may inhibit accumulations of substantial amounts of our common stock without the approval of
our Board of Directors.
These provisions, either alone, or in combination with each other, give our current
directors and executive officers a substantial ability to influence the outcome of a proposed
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