Dollar General 2006 Annual Report Download - page 4

Download and view the complete annual report

Please find page 4 of the 2006 Dollar General annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 165

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165

PART I
ITEM 1. BUSINESS
General
We are a leading value discount retailer of quality general merchandise at everyday low
prices. Through conveniently located stores, we offer a focused assortment of basic consumable
merchandise including health and beauty aids, packaged food and refrigerated products, home
cleaning supplies, housewares, stationery, seasonal goods, basic clothing and domestics. Dollar
General® stores serve primarily low-, middle- and fixed-income families.
We were founded in 1939 as J.L. Turner and Son, Wholesale. We opened our first dollar
store in 1955, when we were first incorporated as a Kentucky corporation under the name J.L.
Turner & Son, Inc. We changed our name to Dollar General Corporation in 1968 and
reincorporated as a Tennessee corporation in 1998. As of March 2, 2007, we operated 8,260
stores in 35 states, primarily in the southern, southwestern, midwestern and eastern United
States.
Proposed Merger
On March 11, 2007, we entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Buck Holdings LP, a Delaware limited partnership (“Parent”), and Buck
Acquisition Corp., a Tennessee corporation and wholly owned subsidiary of Parent (“Merger
Sub”), pursuant to which Merger Sub will be merged with and into us (the “Merger”). We will
continue as the surviving corporation and as a wholly owned subsidiary of Parent. Merger Sub
and Parent are affiliates of Kohlberg Kravis Roberts & Co., L.P.
Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding
share of our common stock, other than any such shares held by any of our wholly owned
subsidiaries and any shares owned by us, Parent or Merger Sub, will be cancelled and converted
into the right to receive $22.00 in cash, without interest (the “Merger Consideration”). In
addition, immediately prior to the effective time of the Merger, all shares of our restricted stock
and restricted stock units will, unless otherwise agreed by the holder and Parent, vest and be
converted into the right to receive the Merger Consideration. All options to acquire shares of our
common stock will vest immediately prior to the effective time of the Merger and holders of
such options will, unless otherwise agreed by the holder and Parent, be entitled to receive an
amount in cash equal to the excess, if any, of the Merger Consideration over the exercise price
per share of our common stock subject to the option.
Our Board of Directors unanimously approved the Merger Agreement and amended our
Shareholder Rights Plan to exempt the Merger from that Plan’ s operation.
Consummation of the Merger is not subject to a financing condition but is subject to
customary closing conditions, including approval of the Merger Agreement by our shareholders,
regulatory approval and other customary closing conditions. The Merger Agreement places
specified restrictions on certain of our business activities, including but not limited to:
2