Management Stockholder?s Agreement
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Title: |
Management Stockholder?s Agreement |
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Entities: |
Dolgencorp of Texas Inc |
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Date: |
2007 |
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Size: |
Preview shows 29KB of 93KB total |
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Price: |
$54 |
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ID: |
#3270137 |
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Start of
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MANAGEMENT STOCKHOLDER?S AGREEMENT
This Management Stockholder?s Agreement (this ?Agreement?) is entered into as of July 6, 2007 among Dollar General Corporation, a Tennessee corporation (the ?Company?), Buck Holdings, L.P., a Delaware limited partnership (?Parent?), and the undersigned person (the ?Management Stockholder?) (the Company, Parent and the Management Stockholder being hereinafter collectively referred to as the ?Parties?). All capitalized terms not immediately defined are hereinafter defined in Section 7(b) of this Agreement.
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of March 11, 2007 (the ?Merger Agreement?), by and among Parent, Buck Acquisition Corp., a Tennessee corporation and a direct wholly owned subsidiary of Parent (?Merger Sub?) and the Company, and subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will on the Closing Date (as defined in Section 7(b) below) merge with and into the Company (the ?Merger?), with the Company surviving the Merger;
WHEREAS, in connection with the Merger, KKR 2006 Fund L.P. and its affiliated investment funds, KKR PEI Investments, L.P., GS Capital Partners VI Fund, L.P., GS Capital Partners VI Parallel, L.P., GS Capital Partners VI GmbH & Co. KG and GS Capital Partners VI Offshore Fund, L.P., and Citigroup Capital Partners II Employee Master Fund, L.P., Citigroup Capital Partners II 2007 Citigroup Investment, L.P., Citigroup Capital Partners II Onshore, L.P., Citigroup Capital Partners II Cayman Holdings, L.P. and CPE Co-Investment (Dollar General) LLC (collectively, the ?Investors?) are contributing certain funds to Parent in exchange for limited partnership units representing, as of the Closing Date;
WHEREAS, as a result of the Merger and after giving effect to the issuance of all Rollover Stock and Purchased Stock (in each case as defined below) in connection therewith, immediately after the Merger on the Closing Date, Parent will own, beneficially and of record, approximately 99.7% of the issued and outstanding shares of the Company?s common stock, par value $0.50 per share (the ?Common Stock?);
WHEREAS, in connection with the Merger, the Management Stockholder has been selected by the Company (i) to exchange certain shares of common stock of the Company owned immediately prior to the Effective Time for new shares of Common Stock (the ?Rollover Stock?) pursuant to an Exchange Agreement entered into between the Management Stockholder and Parent (the ?Exchange Agreement?), which exchange the Parties intend for U.S. federal income tax purposes to be treated as an exchange of shares by the Management Stockholder in a transaction described in section 1036 and/or section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended, in which no gain or loss is recognized by the Management Stockholder; (ii) to exchange all or a portion of the Management Stockholder?s options to purchase shares of common stock of the Company outstanding prior to the effective time of the Merger for fully-exercisable options to purchase Common Stock after the Merger (the ?Rollover Options?) pursuant to the terms of the Company?s current option plan under which the options were issued (the ?Pre-Merger Plans?), as adjusted pursuant to the Option Rollover Agreement to be entered into between the Management Stockholder and the Company (the ?Option Rollover Agreement?); (iii) to be permitted to transfer to the Company cash in exchange for shares of Common Stock (the ?Purchased Stock?); and/or (iv) to receive options to purchase shares of Common Stock (the
?New Options? and together with the Rollover Options, the ?Options?) pursuant to the terms set forth below and the terms of the 2007 Stock Incentive Plan for Key Employees of Dollar General Corporation and its Affiliates (the ?Option Plan?) and the Stock Option Agreement dated as of the date hereof, entered into by and between the Company and the Management Stockholder (the ?New Option Agreement? and together with the Option Rollover Agreement, the ?Stock Option Agreements?); and
WHEREAS, this Agreement is one of several other agreements (?Other Management Stockholders Agreements?) which concurrently with the execution hereof or in the future will be entered into between the Company and other individuals who are or will be key employees of the Company or one of its subsidiaries (collectively, the ?Other Management Stockholders?).
NOW THEREFORE, to implement the foregoing and in consideration of the mutual agreements contained herein, the Parties agree as follows:
1. Issuance of Purchased Shares; New Options; Rollover Stock and Options; Voting.
(a) Subject to the terms and conditions hereinafter set forth, the Management Stockholder hereby subscribes for and shall purchase, as of the Closing Date (but immediately after the Effective Time), and the Company shall issue and deliver to the Management Stockholder as of the Closing Date, the number of shares of Purchased Stock at a per share purchase price (the ?Base Price?), in each case as set forth on Schedule I hereto, which Base Price is equal to the effective per share purchase price paid by the Investors for the shares of the Company in connection with the Merger.
(b) Immediately prior to the Effective Time, the Management Stockholder shall, if applicable, transfer to Parent the shares identified by such Management Stockholder in the Exchange Agreement and immediately after the Effective Time the Management Stockholder will receive a number of shares, in each case pursuant to the Exchange Agreement. The Parties agree that they will not treat the Management Stockholder as holding a limited partnership interest in Parent for U.S. federal income tax purposes.
(c) Subject to the terms and conditions hereinafter set forth and as set forth in the Option Plan, as of the Closing Date the Company is granting to the Management Stockholder New Options, at an initial exercise price equal to $5.00, to acquire the number of shares of Common Stock as set forth in such Management Stockholder?s New Option Agreement which the Parties shall execute and deliver to each other copies of concurrently with the issuance of such New Options.
(d) Subject to the terms and conditions hereinafter set forth and as set forth in the Option Rollover Agreement and the Pre-Merger Plans, as of the Effective Time, the Rollover Options shall be adjusted as set forth in the Option Rollover Agreement.
(e) The Company shall have no obligation to sell any Purchased Stock to any person who (i) is a resident or citizen of a state or other jurisdiction in which the sale of the Common Stock to him or her would constitute a violation of the securities or ?blue sky? laws of such jurisdiction or (ii) is not an employee or director of the Company or its subsidiaries as of the Closing Date.
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2. Management Stockholder?s Representations, Warranties and Agreements.
(a) The Management Stockholder agrees and acknowledges that he will not, directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of (any of the foregoing acts being referred to herein as a ?transfer?) any shares of Purchased Stock, Rollover Stock and, at the time of exercise, Common Stock issuable upon exercise of Options (?Option Stock?; together with all Purchased Stock, Rollover Stock and any other Common Stock otherwise acquired and/or held by the Management Stockholder Entities as of or after the date hereof, ?Stock?), except as provided in this Section 2(a) below and Section 3 hereof. If the Management Stockholder is an Affiliate of the Company, the Management Stockholder also agrees and acknowledges that he or she will not transfer any shares of the Stock unless:
(i) the transfer is pursuant to an effective registration statement under the Securities Act of 1933, as amended, and the rules and regulations in effect thereunder (the ?Act?), and in compliance with applicable provisions of state securities laws; or
(ii) (A) counsel for the Management Stockholder (which counsel shall be reasonably acceptable to the Company) shall have furnished the Company with an opinion or other advice, reasonably satisfactory in form and substance to the Company, that no such registration is required because of the availability of an exemption from registration under the Act and (B) if the Management Stockholder is a citizen or resident of any country other than the United States, or the Management Stockholder desires to effect any transfer in any such country, counsel for the Management Stockholder (which counsel shall be reasonably satisfactory to the Company) shall have furnished the Company with an opinion or other advice reasonably satisfactory in form and substance to the Company to the effect that such transfer will comply with the securities laws of such jurisdiction.
Notwithstanding the foregoing, the Company acknowledges and agrees that any of the following transfers of Stock are deemed to be in compliance with the Act and this Agreement (including without limitation any restrictions or prohibitions herein), and no opinion of counsel is required in connection therewith: (1) a transfer made pursuant to Sections 3, 4, 5, 6 or 9 hereof, (2) a transfer (x) upon the death or Disability of the Management Stockholder to the Management Stockholder?s Estate or (y) to the executors, administrators, testamentary trustees, legatees, immediate family members or beneficiaries of a person who has become a holder of Stock in accordance with the terms of this Agreement; provided that it is expressly understood that any such transferee shall be bound by the provisions of this Agreement, (3) a transfer made after the Closing Date in compliance with the federal securities laws to a Management Stockholder?s Trust; provided that such transfer is made expressly subject to this Agreement and that the transferee agrees in writing to be bound by the terms and conditions hereof as a ?Management Stockholder? with respect to the representations and warranties and other obligations of this Agreement; and provided further that it is expressly understood and agreed that if such Management Stockholder?s Trust at any point includes any person or entity other than the Management Stockholder, his spouse (or ex-spouse) or his lineal descendants (including adopted children) such that it fails to meet the definition thereof as set forth in Section 7(b) hereof, such transfer shall no longer be deemed in compliance with this Agreement and shall be subject to 3(d) below, (4) a transfer of Stock made by the Management Stockholder to Other Management Stockholders; provided that it is expressly
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understood that any such transferee(s) shall be bound by the provisions of this Agreement (in addition to the provisions set forth in an Other Management Stockholders Agreement to which such Other Management Stockholders are a party), and (5) a transfer made by the Management Stockholder, with the Board?s approval, to the Company or any subsidiary of the Company.
(b) The certificate (or certificates) representing the Stock, if any, shall bear the following legend:
?THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE MANAGEMENT STOCKHOLDER?S AGREEMENT BETWEEN DOLLAR GENERAL CORPORATION (THE ?COMPANY?) AND THE MANAGEMENT STOCKHOLDER NAMED ON THE FACE HEREOF OR THE SALE PARTICIPATION AGREEMENT AMONG SUCH MANAGEMENT STOCKHOLDER AND BUCK HOLDINGS, L.P., IN EACH CASE DATED AS OF JULY 6, 2007 (COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY) AND ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS.?
(c) The Management Stockholder acknowledges that he has been advised that (i) the Stock are characterized as ?restricted securities? under the Act inasmuch as they are being acquired from the Company in a transaction not involving a Public Offering and that under the Act (including applicable regulations) the Stock may be resold without registration under the Act only in certain limited circumstances, (ii) a restrictive legend in the form heretofore set forth shall be placed on the certificates (if any) representing the Stock and (iii) a notation shall be made in the appropriate records of the Company indicating that the Stock is subject to restrictions on transfer and appropriate stop transfer restrictions will be issued to the Company?s transfer agent with respect to the Stock.
(d) If any shares of the Stock are to be disposed of in accordance with Rule 144 under the Act or otherwise, the Management Stockholder shall promptly notify the Company of such intended disposition and shall deliver to the Company at or prior to the time of such disposition such documentation as the Company may reasonably request in connection with such sale and take any actions reasonably requested by the Coordination Committee prior to any such sale (provided that such instructions shall not have a disproportionate adverse impact on any Management Stockholder vis-?-vis any other stockholders of the Company or limited partners of Parent) and, in the case of a disposition pursuant to Rule 144, shall deliver to the Company an executed copy of any notice on Form 144 required to be filed with the SEC.
(e) The Management Stockholder agrees that, if any shares of the Stock are offered to the public pursuant to an effective registration statement under the Act (other than registration of securities issued on Form S-8, S-4 or any successor or similar form), the Management Stockholder will not effect any public sale or distribution of any shares of the Stock not covered by such registration statement from the time of the receipt of a notice from the Company that the Company has filed or imminently intends to file such registration statement to, or within 180 days (or such shorter period as may be consented to by the
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managing underwriter or underwriters) in the case of the IPO and ninety (90) days (or in an underwritten offering such shorter period as may be consented to by the managing underwriter or underwriters, if any) in the case of any other Public Offering after the effective date of such registration statement, unless otherwise agreed to in writing by the Company.
(f) The Management Stockholder represents and warrants that (i) with respect to the Purchased Stock, Rollover Stock and Option Stock, the Management Stockholder has received and reviewed the available information relating to such Stock, including having received and reviewed the documents related thereto, certain of which documents set forth the rights, preferences and restrictions relating to the Options and the Stock underlying the Options and (ii) the Management Stockholder has been given the opportunity to obtain any additional information or documents and to ask questions and receive answers about such information, the Company and the business and prospects of the Company which the Management Stockholder deems necessary to evaluate the merits and risks related to the Management Stockholder?s investment in the Stock and to verify the information contained in the information received as indicated in this Section 2(f), and the Management Stockholder has relied solely on such information.
(g) The Management Stockholder further represents and warrants that (i) the Management Stockholder?s financial condition is such that the Management Stockholder can afford to bear the economic risk of holding the Stock for an indefinite period of time and has adequate means for providing for the Management Stockholder?s current needs and personal contingencies, (ii) the Management Stockholder can afford to suffer a complete loss of his or her investment in the Stock, (iii) the Management Stockholder understands and has taken cognizance of all risk factors related to the purchase of the Stock (iv) the Management Stockholder?s knowledge and experience in financial and business matters are such that the Management Stockholder is capable of evaluating the merits and risks of the Management Stockholder?s purchase of the Stock as contemplated by this Agreement, (v) with respect to the Purchased Stock, such Purchased Stock is being acquired by the Management Stockholder for his or her own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Act, and the Management Stockholder has no present intention of selling or otherwise distributing the Purchased Stock in violation of the Act, and (vi) if the box next to the Management Stockholder?s signature is checked, the Management Stockholder is an ?accredited investor? as defined in Rule 501(a) of Regulation D, as amended, under the Act.
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