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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 22, 1994
DOLLAR GENERAL CORPORATION
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Kentucky 0-4769 61-0502302
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(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
104 Woodmont Blvd., Suite 500, Nashville, TN 37205
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (615) 783-2000
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On August 22, 1994, Dollar General Corporation (the "Company")
announced the issuance of 1,715,742 shares of a newly authorized
series of convertible junior preferred stock, as approved by the
Board of Directors. The shares of Series A Convertible Junior
Preferred Stock were issued in exchange for the 8,578,710 shares
of Dollar General Common Stock, $.50 par value per share, owned
by C.T.S., Inc., a personal holding company ("C.T.S.")
controlled by members of the Turner family (founders of the
Company). The exchange, negotiated and recommended by a special
committee of independent directors of the Company's Board of
Directors, came in response to a request from C.T.S. to consider
a transaction which meets certain estate planning needs of the
Turner family. In connection with the exchange, the Board of
Directors obtained an opinion from its financial advisor that
the exchange is fair, from a financial point of view, to the
stockholders of the Company.
The Articles of Amendment to the Restated Articles of
Incorporation setting forth the terms, rights and conditions of
the Series A Convertible Junior Preferred Stock were approved by
the Board of Directors and designated from the undesignated
preferred stock previously authorized by the Company's
stockholders. The transaction was effected through an Exchange
Agreement dated August 22, 1994 by and among the Company,
Dolgencorp, Inc., a wholly owned subsidiary of the Company,
C.T.S. and the shareholders of C.T.S. The terms and conditions
of the exchange, the rights and preferences of the Series A
Convertible Junior Preferred Stock and the certain limited
registration rights for the underlying common stock for the
benefit of the estates of the Turner Children Trust dated
January 21, 1980 are more fully described in the Exchange
Agreement, the Articles of Amendment to the Restated Articles of
Incorporation and the Registration Rights Agreement,
respectively, copies of which are attached to this report as
exhibits and incorporated by reference herein in their entirety.
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits:
4.1 Articles of Amendment dated August 22, 1994 to the
Restated Articles of Incorporation
10.1 Exchange Agreement dated August 22, 1994, by and among
Dollar General Corporation, Dolgencorp, Inc., C.T.S.,
Inc. and stockholders of C.T.S., Inc.
10.2 Registration Rights Agreement dated August 22, 1994 by
and among Dollar General Corporation, Turner Children
Trust dated January 21, 1980, Cal Turner, Jr., James
Stephen Turner, Laura Jo Dugas and Elizabeth Turner
Campbell.
99.1 Press Release, dated August 22, 1994
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DOLLAR GENERAL CORPORATION
Date: August 22, 1994 By: /s/Cal Turner, Jr.
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Cal Turner, Jr.
Chairman, President and Chief Executive
Officer
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EXHIBIT INDEX
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No. Description
<S> <C>
4.1 Articles of Amendment dated August 22, 1994 to the Restated
Articles of Incorporation
10.1 Exchange Agreement dated August 22, 1994, by and among Dollar
General Corporation, Dolgencorp, Inc., C.T.S, Inc. and the
stockholders of C.T.S., Inc.
10.2 Registration Rights Agreement dated August 22, 1994 by and among
Dollar General Corporation, Turner Children Trust dated January
21, 1994, Cal Turner, Jr. James Stephen Turner, Laura Jo Dugas and
Elizabeth Turner Campbell
99.1 Press Release dated August 22, 1994
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EXHIBIT 4.1
ARTICLES OF AMENDMENT
TO THE RESTATED ARTICLES OF INCORPORATION
OF
DOLLAR GENERAL CORPORATION
The undersigned Cal Turner, Jr. and Bob Carpenter, being the President
and Secretary, respectively, of Dollar General Corporation hereby certify that:
FIRST. The name of the Corporation is Dollar General Corporation;
SECOND. The Restated Articles of Incorporation of the Corporation was
filed with the Secretary of State of the State of Kentucky on November 3, 1968;
THIRD. The Restated Articles of Incorporation of the Corporation (as
heretofore amended) is hereby further amended by designating the current
Paragraph B of Article V as Paragraph C and by the addition of the following as
Paragraph B to Article V which shall read in its entirety as follows:
B. Series A Convertible Junior Preferred Stock. The Corporation is
authorized to issue 1,715,742 shares of Series A Convertible Junior Preferred
Stock. The following is a statement of the powers, designations, preferences
and relative, participating, optional and other special rights of the Series A
Convertible Junior Preferred Stock and the qualifications, limitations and
restrictions of the Series A Convertible Junior Preferred Stock.
1. Voting Rights. Each share of Series A Convertible Junior
Preferred Stock shall entitle the holder thereof to vote with the holders of
the shares of Common Stock of the Corporation on all matters submitted to a
vote of the holders of the shares of Common Stock of the Corporation and to
have the number of votes as such holder would have upon conversion of the
Series A Convertible Junior Preferred Stock to Common Stock as provided in
paragraph 4(C)(iv). The holders of the Series A Convertible Junior Preferred
Stock shall vote separately as a class only on such matters that require a
class vote by law.
2. Dividends. Subject to the rights of the holders of any shares
of any series of preferred stock ranking superior to the Series A Convertible
Junior Preferred Stock with respect to dividends, the holders of Series A
Convertible Junior Preferred Stock shall be entitled to receive cash dividends
out of funds legally available therefor, if, when and as cash dividends are
declared by the Board of Directors and paid out of funds legally available
therefor with respect to the Common Stock, in an amount equal to ninety percent
(90%) of the dividend paid per share of Common Stock times the number of shares
of Common Stock that the holder of the Series A Convertible Junior Preferred
Stock would be entitled to receive upon conversion pursuant to paragraph
4(C)(iv) for each share of Series A Convertible Junior Preferred Stock then
held ("Participating Dividends"). If the Board of Directors shall declare a
cash dividend on the Common Stock, the Board of Directors shall simultaneously
declare a Participating Dividend on the Series A Convertible Junior Preferred
Stock.
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3. Liquidation, Merger, Etc.
(A) In the event of the voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, after payment in
full of all amounts due and owing to creditors and holders of superior rights
of any series or class of preferred stock, if any, the holders of Series A
Convertible Junior Preferred Stock shall first be entitled, before any
distribution is made upon any shares of Common Stock of the Corporation, to
receive a preferential payment from the assets of the Corporation of cash or
property (to the extent of funds legally available therefor) equal to $.50 per
share (the "Series A Preference Amount") of Series A Convertible Junior
Preferred Stock, such amount payable with respect to one share of Series A
Convertible Junior Preferred Stock being sometimes referred to as the "Series A
Liquidation Payment" and with respect to all shares of Series A Convertible
Junior Preferred Stock being sometimes referred to as the "Series A Liquidation
Payments." If upon such liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, the assets to be distributed
among the holders of Series A Convertible Junior Preferred Stock shall be
insufficient to permit payment to the holders of Series A Convertible Junior
Preferred Stock of the Series A Liquidation Payments, then the entire assets of
the Corporation to be so distributed shall be distributed ratably among the
holders of Series A Convertible Junior Preferred Stock.
(B) Upon any such liquidation, dissolution or winding-up
of the Corporation, after the holders of Series A Convertible Junior Preferred
Stock shall have been paid the Series A Liquidation Payments in full and the
payment of any other distribution that may be required with respect to any
series of preferred stock that may from time to time come into existence
ranking on a parity with or senior to the Series A Convertible Junior Preferred
Stock, the remaining net assets of the Corporation shall be distributed to the
holders of stock ranking on liquidation junior to the Series A Convertible
Junior Preferred Stock. Written notice of such liquidation, dissolution or
winding-up, stating a payment date and, to the extent known, the amount of the
Series A Liquidation Payments and the place where said Series A Liquidation
Payments shall be payable, shall be given by first class mail (postage
prepaid), by telecopy, by overnight courier, or by telex, not less than ten
(10) calendar days prior to the payment date stated therein, to the holders of
record of the Series A Convertible Junior Preferred Stock, such notice to be
addressed to each such holder at the address shown on the stock transfer
records of the Corporation.
(C) In case outstanding shares of Series A Convertible
Junior Preferred Stock shall be subdivided (by stock split, stock dividend or
otherwise) into a greater number of shares of Series A Convertible Junior
Preferred Stock, the relevant Series A Preference Amount in effect immediately
prior to each such subdivision shall, simultaneously with the effectiveness of
such subdivision, be proportionately reduced, and, conversely, in the case
outstanding shares of Series A Convertible Junior Preferred Stock shall be
combined into a smaller number of shares of Series A Convertible Junior
Preferred Stock, the relevant Series A Preference Amount in effect immediately
prior to each such combination, shall, simultaneously with the effectiveness of
such combination, be proportionately increased.
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(D) Whenever the distribution provided for in this
Paragraph 3 shall be payable in property other than cash, the value of such
distribution shall be the fair market value of such property as determined in
good faith by the Board of Directors of the Corporation.
4. Conversion.
(A) Right of Conversion. At the option of the holder
thereof, at any time following the second anniversary of the date the shares of
Series A Convertible Junior Preferred Stock are issued (the "Initial Issuance
Date"), each share of Series A Convertible Junior Preferred Stock may be
converted into shares of fully paid and nonassessable Common Stock at the
Conversion Rate (as hereinafter defined), determined as hereinafter provided,
in effect on the date the certificate is surrendered for conversion. The
option to convert shares of the Series A Convertible Junior Preferred Stock may
be exercised by surrendering to the Corporation or any transfer agent for the
Series A Convertible Junior Preferred Stock the certificate or certificates for
the shares of Series A Convertible Junior Preferred Stock so to be converted,
with the notice of conversion on such certificate duly completed and executed.
Shares shall be deemed to have been converted immediately prior to the close of
business on the day of surrender of such shares in the manner herein prescribed
for conversion and the person entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder of
such Common Stock as of such date. The holder of Series A Convertible Junior
Preferred Stock, upon surrender of such certificates for conversion, shall not
thereafter receive any Participating Dividend except any Participating Dividend
for which the record date preceded the conversion date and the payment date
shall be subsequent to the conversion date.
(B) Automatic Conversion of Series A Convertible Junior
Preferred Stock Upon the Sale and Transfer Pursuant to a Foreclosure by a Third
Party, Upon Dissolution or Termination of a Holder, or Upon the Merger,
Consolidation, Share Exchange of the Corporation or Sale of All or
Substantially All of the Corporation's Assets.
(i) Upon the sale and transfer pursuant to a
foreclosure by a third party (not to include any CTS Shareholder, a direct
beneficiary (as of the Initial Issuance Date) of the Turner Children Trust
dated January 21, 1980, or a wholly owned entity of one of the direct
beneficiaries) of a security interest in shares of Series A Convertible Junior
Preferred Stock, such shares of Series A Convertible Junior Preferred Stock
shall be converted automatically into the number of shares of Common Stock into
which such shares of Series A Convertible Junior Preferred Stock are then
convertible pursuant to Paragraph 4(C) on the date of such foreclosure without
any further action by the holder or transferee of such shares of Series A
Convertible Junior Preferred Stock and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent for the Series A Convertible Junior Preferred Stock. In order to receive
a Common Stock certificate, the transferee of the shares of Series A
Convertible Junior Preferred Stock shall surrender to the Corporation or its
transfer agent for the Series A Convertible Junior Preferred Stock the
certificate or certificates representing such shares properly endorsed or
accompanied by proper instruments of assignment, duly executed by or on behalf
of the
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record holder of such certificate or certificates. Certificates representing
the shares of Common Stock into which such shares of Series A Convertible
Junior Preferred Stock were so converted will be issued as soon as practicable.
(ii) Except for the distribution of shares of
Series A Convertible Junior Preferred Stock upon the dissolution of the initial
holder of the Series A Convertible Junior Preferred Stock, upon the dissolution
or termination of a holder of Series A Convertible Junior Preferred Stock, such
shares of Series A Convertible Junior Preferred Stock held by such holder shall
be converted automatically into the number of shares of Common Stock into which
such shares of Series A Convertible Junior Preferred Stock are then convertible
pursuant to Paragraph 4(C) on the date of such dissolution or termination
without any further action by the holder of such shares of Series A Convertible
Junior Preferred Stock and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent for the Series
A Convertible Junior Preferred Stock. In order to receive a Common Stock
certificate, the distributee or distributees of such shares of Series A
Convertible Junior Preferred Stock shall surrender to the Corporation or its
transfer agent for the Series A Convertible Junior Preferred Stock the
certificate or certificates representing such shares accompanied by evidence of
the dissolution or termination of the record holder of such shares and duly
executed instructions for the transfer of such shares. Certificates
representing the shares of Common Stock into which such shares of Series A
Convertible Junior Preferred Stock were so converted will be issued as soon as
practicable.
(iii) In the event of any merger, consolidation or
share exchange of the Corporation into or with any other corporation or entity,
in which the Corporation is not the surviving entity (except for purposes of a
merger effected exclusively for the purpose of changing the domicile of the
Corporation), or sale of all or substantially all of the assets of the
Corporation, all outstanding shares of Series A Convertible Junior Preferred
Stock shall be automatically converted immediately prior to consummation of
such event into the number of shares of Common Stock specified in Paragraph
4(C)(iv) (regardless of the date of such merger, consolidation, share exchange,
sale of all or substantially all of the Corporation's assets) without any
further action by the holder of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent for the Series A Convertible Junior Preferred Stock. The agent
responsible for the receipt of certificates representing shares of the
Corporation's Common Stock and the payment or distribution of the consideration
to be received by the shareholders of the Corporation in such merger,
consolidation or share exchange shall be instructed to receive and treat
certificates representing the Series A Convertible Junior Preferred Stock as if
such certificates represented the applicable number of shares of Common Stock.
In a transaction involving the sale of all or substantially all of the assets
of the Corporation, certificates representing shares of Series A Convertible
Junior Preferred Stock shall be treated as set forth in subparagraphs (i) and
(ii) above.
(C) Conversion Rate. The number of shares of Common
Stock issuable upon conversion of each share of Series A Convertible Junior
Preferred Stock (the "Conversion Rate") shall be as follows, subject to
adjustment as provided in paragraph 4(F):
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(i) From the Initial Issuance Date through the
third anniversary date thereof, one share of the Series A Convertible Junior
Preferred Stock shall be convertible into 4.5 shares of Common Stock;
(ii) From the day following the third anniversary
date of the Initial Issuance Date through the fourth anniversary date thereof,
one share of the Series A Convertible Junior Preferred Stock shall be
convertible into a 4.625 shares of Common Stock;
(iii) From the day following the fourth anniversary
date of the Initial Issuance Date through the fifth anniversary date thereof,
one share of the Series A Convertible Junior Preferred Stock shall be
convertible into 4.75 shares of Common Stock; and
(iv) After the fifth anniversary date of the
Initial Issuance Date, one share of the Series A Convertible Junior Preferred
Stock shall be convertible into 5.0 shares of Common Stock.
(D) No Fractional Shares to be Issued. No fractional
shares of Common Stock nor scrip representing fractional shares shall be issued
upon the conversion of the Series A Convertible Junior Preferred Stock. If
more than one share of Series A Convertible Junior Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate number of Series A Convertible Junior Preferred Stock so
surrendered. Instead of any fractional shares of Common Stock which would
otherwise be issuable upon conversion of any share or shares of Series A
Convertible Junior Preferred Stock, the Corporation shall pay a cash adjustment
in respect of such fraction based on the fair value of such share.
(E) Extraordinary Event.
(i) Upon the occurrence of an Extraordinary Common
Stock Event (defined below), the holders of the Series A Convertible Junior
Preferred Stock shall participate in any such Extraordinary Common Stock Event
at the rate equal to the then applicable conversion rate as set forth in
paragraph 4(C)(iv) for each share of Series A Convertible Junior Preferred
Stock. An "Extraordinary Common Stock Event" shall mean (a) the issuance of
additional shares of Common Stock as a dividend or other distribution on
outstanding Common Stock, (b) a stock split or subdivision of outstanding share
of Common Stock into a greater number of shares of Common Stock, or (c) a
reverse stock split or combination of outstanding shares of Common Stock into a
smaller number of shares of Common Stock.
(ii) Upon the occurrence of a Recapitalization
(defined below) of the Corporation or the payment of a special dividend,
defined herein as a cash dividend other than a regular periodic cash dividend
paid in an amount exceeding 200% of any cash dividend paid per share within the
immediately preceding fiscal year (a "Special Dividend"),
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the holders of the Series A Convertible Junior Preferred Stock shall
participate in any such Recapitalization or Special Dividend with the Common
Stock on an as converted basis as determined at the then applicable conversion
rate set forth in paragraph 4(C)(iv) for each share of Series A Convertible
Junior Preferred Stock. Recapitalization is defined herein as any
recapitalization, reorganization or reclassification of the Common Stock of the
Corporation.
(F) Adjustment to Conversion Rate. Upon the occurrence of an
Extraordinary Common Stock Event as defined in 4(E)(i), the relevant Conversion
Rates set forth in Paragraph 4(C) above shall be proportionately increased or
decreased accordingly.
(G) Corporation Will Reserve Stock for Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
Common Stock, solely for the purpose of issuance upon conversion of the Series
A Convertible Junior Preferred Stock as herein provided, such number of shares
of Common Stock as shall then be issuable upon the conversion of all
outstanding Series A Convertible Junior Preferred Stock. All shares of Common
Stock which shall be so issuable shall be duly authorized and, when issued upon
conversion of the Series A Convertible Junior Preferred Stock, shall be validly
issued, fully paid and nonassessable.
(H) No Charge for Conversion. The issuance of
certificates for shares of Common Stock upon the conversion of any shares of
the Series A Convertible Junior Preferred Stock shall be made without charge to
the converting holder of the Series A Convertible Junior Preferred Stock for
such certificates, and such certificates shall be issued in the name of, or in
such names as may be directed by, the holder of the Series A Convertible Junior
Preferred Stock; provided, however, that the Corporation shall not be required
to pay any taxes or other governmental charges which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate
in a name other than that of the record holder of the Series A Convertible
Junior Preferred Stock, and the Corporation shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Corporation the amount of such tax or
other governmental charge or shall have established to the satisfaction of the
Corporation that such tax or other governmental charge has been paid or
provided for. The Corporation may also require, as a condition to the issuance
and delivery of any such certificate, an opinion of counsel acceptable to the
Corporation to the effect that the proposed transfer (as allowable under
Paragraph 7 hereof) either does not require registration, or that an exemption
from registration is available, under federal or any applicable state
securities law.
5. Ranking. The Series A Convertible Junior Preferred Stock
shall rank junior to all other series or classes of preferred stock of the
Corporation.
6. No Redemption. The shares of Series A Convertible Junior
Preferred Stock shall not be redeemable at the option of the holder or the
Corporation.
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7. Transferability. Except for the distribution of shares of
Series A Convertible Junior Preferred Stock upon the dissolution of the initial
holder of the Series A Convertible Junior Preferred Stock, the holders of the
shares of Series A Convertible Junior Preferred Stock may not sell, exchange,
give, devise or otherwise dispose of, either voluntarily or involuntarily, or
by operation of law (including a transfer pursuant to equitable distribution
proceedings) any of the shares of Series A Convertible Junior Preferred Stock;
provided, however, that the holders of the Series A Convertible Junior
Preferred Stock may grant a security interest therein and provided further that
the shares of Series A Convertible Junior Preferred Stock may be transferred to
one or more of the original distributees of the original holder thereof or to
one or more of the direct beneficiaries (as of the Initial Issuance Date) of
the Turner Children Trust dated January 21, 1980.
8. Right of First Refusal Upon Foreclosure, Dissolution of a
Holder or Following the Death of a Holder.
(A) In the event of an automatic conversion of shares of
Series A Convertible Junior Preferred Stock into shares of Common Stock
pursuant to the provisions of Paragraph 4(B)(i) hereof as a result of the sale
and transfer pursuant to a foreclosure by a third party (not to include any CTS
Shareholder, any direct beneficiary of the Turner Children Trust dated January
21, 1980, or a wholly owned entity of one of the direct beneficiaries any
entity affiliated with such person(s) or entity) of a security interest in such
shares, the Corporation shall have the right of first refusal to purchase such
shares of Common Stock. The holder of shares of Series A Convertible Junior
Preferred Stock that are the subject of a foreclosure proceeding shall give the
Corporation thirty (30) days' prior written notice (the "Foreclosure Notice")
of such pending foreclosure proceeding. The Foreclosure Notice shall state the
name, address and telephone number of the party instituting the foreclosure
proceedings (the "Foreclosuring Party") as well as the scheduled date of
foreclosure. During the period following the receipt of the Foreclosure Notice
and prior to the consummation of the foreclosure, the Corporation may elect to
purchase the shares of Common Stock issuable upon the automatic conversion by
giving the Foreclosing Party written notice prior to foreclosure of its intent
to purchase such shares and stating the date (the "Closing Date") that such
purchase shall be consummated, which shall be a date within ten (10) calendar
days of the sale and transfer pursuant to the foreclosure. The purchase price
per share for the shares of Common Stock to be purchased shall be the closing
sale price of the Common Stock on the last trading day preceding the Closing
Date as quoted on any national securities exchange on which the Corporation's
Common Stock is listed, on The Nasdaq National Market, or, if price quotations
for the Common Stock are not available on any such national securities exchange
or The Nasdaq National Market, the mean between the closing bid and asked price
of the Common Stock on the over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or, if no bid quotation is available on the
over-the-counter market, the fair value of such Common Stock as determined in
good faith by the Board of Directors.
(B) In the event of an automatic conversion of shares of
Series A Convertible Junior Preferred Stock into shares of Common Stock
pursuant to the provisions of paragraph 4(B)(ii) hereof as a result of the
termination or dissolution of the holder of
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Series A Convertible Junior Preferred Stock, the Corporation shall have the
right of first refusal to purchase such shares of Common Stock. The holder of
shares of Series A Convertible Junior Preferred Stock shall give the
Corporation thirty (30) days' prior written notice (the "Dissolution Notice")
of such pending dissolution. The Dissolution Notice shall state the scheduled
date of termination or dissolution. During the period following receipt of the
Dissolution Notice and prior to consummation of such termination or
dissolution, the Corporation may elect to purchase the shares of Common Stock,
issuable upon the automatic conversion by giving the holder written notice
prior to termination or dissolution of its intent to purchase such shares and
stating the date (the "Closing Date") that such purchase shall be consummated,
which shall be a date within ten (10) calendar days of the termination or
dissolution. The purchase price per share for the shares of Common Stock to be
purchased hereunder shall be the same as set forth in Paragraph 8(A) above.
(C) In the event of the death of a holder of Series A
Convertible Junior Preferred Stock, the subsequent conversion thereof, if any,
by the estate (the "Estate") of such holder of such shares into Common Stock
and any proposed sale of all or a portion thereof by the Estate, the
Corporation shall have the right of first refusal to purchase such shares of
Common Stock from the Estate. The Estate shall give the Corporation thirty
(30) days' prior written notice of its intent to sell all or a portion of the
underlying Common Stock (or if previously converted, notice of its intent to
sell) stating the proposed sale date. During such thirty-day period following
notice of the Estate's intentions to sell all or a portion of the underlying
Common Stock, the Corporation may elect to purchase such shares of Common Stock
by giving the estate written notice prior to the sale date of its intent to
purchase such shares and stating the date that such purchase shall be
consummated, which date shall be within ten (10) days of the requested date of
conversion or sale if previously converted. The purchase price per share shall
be determined as set forth in Paragraph 8(A) above.
9. Notices of Record Date. In the event of:
(A) any taking by the Corporation of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any share of stock of any
class or any other securities or property, or to receive any other right; or
(B) any recapitalization of the Corporation, any
reclassification of the capital stock of the Corporation, any merger or
consolidation of the Corporation, or any transfer of all or substantially all
of the assets of the Corporation to any other corporation, or any other entity
or person; or
(C) any voluntary or involuntary dissolution, liquidation
or winding-up of the Corporation; then and in each such event the Corporation
shall mail or cause to be mailed to each holder of Series A Convertible Junior
Preferred Stock a notice specifying (i) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right and a
description of such dividend, distribution or right, (ii) the date on
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which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is expected to
become effective and (iii) the time, if any, that is to be fixed, as to when
the holders of record of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be sent by first class mail (postage prepaid),
or by telecopy or overnight courier or by telex, at least ten (10) calendar
days prior to the date specified in such notice on which such action is to be
taken.
10. Status of Converted Series A Convertible Junior Preferred
Stock. No share(s) of Series A Convertible Junior Preferred Stock acquired by
the Corporation by reason of repurchase, conversion or otherwise shall be
reissued as Series A Convertible Junior Preferred Stock, and all such acquired
shares shall (i) be canceled, retired and eliminated from the Series A
Convertible Junior Preferred Stock and (ii) shall become authorized and
unissued shares of the Corporation's undesignated preferred stock set forth in
Paragraph A of Article V of the Corporation's Restated Articles of
Incorporation, as amended. No further corporate action by the Corporation
shall be necessary to reduce the authorized number of shares of the Series A
Convertible Junior Preferred Stock solely as a result of the conversion of
shares of the Series A Convertible Junior Preferred Stock.
FOURTH. The foregoing amendment was authorized by the Board of
Directors at a meeting of the Board of Directors duly called and held, in the
exercise of authority conferred by the Restated Articles of Incorporation, as
amended, and in accordance with Section 271B.10-020 of the Kentucky Business
Corporation Act.
IN WITNESS WHEREOF, Dollar General Corporation does hereby file in
triplicate originals of these Articles of Amendment to the Restated Articles of
Incorporation through its President and Chairman, Cal Turner, Jr., and its
Secretary, Bob Carpenter, this 22nd day of August, 1994.
DOLLAR GENERAL CORPORATION
/s/ Cal Turner, Jr.
--------------------------------
Cal Turner, Jr.
/s/ Bob Carpenter
--------------------------------
Bob Carpenter
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EXHIBIT 10.1
EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement") is made as of August 22,
1994 among Dollar General Corporation, a Kentucky corporation ("Dollar
General"), Dolgencorp, Inc., a Kentucky corporation and wholly owned subsidiary
of Dollar General ("Dolgencorp"), C.T.S., Inc., a Kentucky corporation ("CTS")
and CTS's shareholders, the Turner Children Trust dated January 21, 1980, the
Cal Turner Family Foundation and the Turner Foundation for Lindsey Wilson
College, Inc., a Kentucky corporation, (collectively the "CTS Shareholders").
BACKGROUND STATEMENT
CTS has proposed to Dollar General a securities exchange pursuant to
which CTS would transfer 100% of the outstanding Dollar General common stock,
$.10 par value per share (the "Common Stock") currently held by CTS to Dollar
General's wholly owned subsidiary Dolgencorp in exchange for 1,715,742 shares
of Dollar General's newly authorized Series A Convertible Junior Preferred
Stock, (the "Series A Preferred Stock"), the terms and conditions of which are
set forth in the Articles of Amendment to the Restated Articles of
Incorporation of Dollar General Corporation, as amended, attached hereto as
Exhibit A. The aggregate number of shares of Dollar General Common Stock held
by CTS as of this date is 8,578,710 (the "CTS Stock"). The shareholders of CTS
intend to liquidate CTS and distribute its assets (the "CTS Liquidation")
promptly following the closing of the securities exchange pursuant to this
Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:
ARTICLE 1
The Exchange
1.1 The Exchange. Immediately preceding the Closing (defined below),
Dollar General shall make a capital contribution of $200,527,346.25 to
Dolgencorp. Dolgencorp will use the capital contribution to acquire the Series
A Preferred Stock from Dollar General. Immediately thereafter, CTS and
Dolgencorp will exchange the CTS Stock for the Series A Preferred Stock,
whereby CTS will receive one share of Series A Preferred Stock for each five
shares of the CTS Stock (the "Exchange").
1.2 Closing. The consummation of the Exchange and the related
transactions described in Section 1.1 of this Agreement shall take place at the
corporate offices of Dollar General on the date hereof (the "Closing").
1.3 Fractional Shares. No scrip or fractional shares of Series A
Preferred Stock shall be issued in the Exchange. CTS shall be entitled to
receive a cash payment with respect to
<PAGE> 2
any fractional share in an amount equal to the reported closing sale price on
the Closing date of one share of Common Stock (as reported on the Nasdaq
National Market) multiplied by five, the product of which is multiplied by such
fractional share. Promptly after the Closing, Dolgencorp shall pay CTS a cash
payment equal to the value of any such fractional share as so determined.
1.4 Transfer Agent. The parties hereto agree that Dollar General shall
be appointed as the Transfer Agent for the Series A Preferred Stock.
1.5 Surrender of Certificates. At the Closing, (a) CTS shall surrender
the certificates, representing the CTS Stock duly endorsed for transfer to
Dolgencorp; and (b) Dolgencorp shall deliver to CTS the certificates
representing the Series A Preferred Stock to be exchanged pursuant to the terms
of this Agreement, in such names and denominations as CTS shall have instructed
Dollar General in writing.
ARTICLE II
Representations and Warranties of CTS
CTS and the CTS Shareholders (with respect to Sections 2.2, 2.3, 2.6,
2.9 and 2.10) represent and warrant to Dollar General and Dolgencorp as of the
date of this Agreement as follows:
2.1 Organization; Corporate Authority; Compliance With Law. CTS is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Kentucky. CTS has all requisite corporate power and
authority to own, operate and lease its properties and assets and to carry on
its business as now conducted. CTS is not in violation of any order of any
court, governmental authority or arbitration board or tribunal, or any law,
ordinance, governmental rule or regulation to which CTS or any of its
properties or assets is subject. CTS has obtained all licenses, permits, and
other authorizations and has taken all actions required by applicable law or
governmental regulations in connection with its business as now conducted.
2.2 Authorization, Validity and Effect of Agreement. CTS has the full
corporate power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby. The consummation by CTS and the
CTS Shareholders of the transaction contemplated hereby has been duly
authorized by all requisite corporate and trust actions, as applicable,
including, but not limited to appropriate shareholder, trustee, trust committee
and member approval. This Agreement constitutes, and all agreements and
documents contemplated hereby will constitute, the valid and legally binding
obligations of CTS and the CTS Shareholders, enforceable in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
2
<PAGE> 3
2.3 No Violation. Neither the execution and delivery by CTS and the
CTS Shareholders of this Agreement nor the consummation by CTS and the CTS
Shareholders of the transactions contemplated hereby in accordance with the
terms hereof, will: (i) conflict with or result in a breach of any provisions
of (a) the Articles of Incorporation or Bylaws of CTS or the Turner Foundation
for Lindsey Wilson College, Inc., respectively, or (b) the respective trust
agreements dated January 21, 1980 and December 20, 1991; (ii) conflict with,
result in a breach of any provision of or the modification or termination of,
constitute a default under, or result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the assets of CTS
pursuant to any material commitment, lease, contract, or other material
agreement or instrument to which CTS is a party; or (iii) violate any order,
arbitration award, judgment, writ, injunction, decree statute, rule or
regulation applicable to CTS or the CTS Shareholders.
2.4 Assets. CTS owns the assets reflected on the unaudited June 30,
1994 CTS balance sheet, including but not limited to the CTS Stock, with good
and marketable title, free and clear of any and all claims, liens, mortgages,
options, charges, conditional sale or title retention agreements, security
interests, restrictions, easements, or encumbrances whatsoever and free and
clear of any rights or privileges capable of becoming claims, liens, mortgages,
options, charges, security interests, restrictions, easements or encumbrances,
except as set forth on Schedule 2.4 of this Agreement. Upon transfer,
Dolgencorp shall receive the CTS Stock free and clear of any and all claims,
liens, mortgages, options, charges, security interests or encumbrances
whatsoever.
2.5 Fair Market Value. The CTS Stock to be exchanged with Dolgencorp
constitutes not less than ninety percent (90%) of the fair market value of the
net assets and at least seventy percent (70%) of the fair market value of the
gross assets held by CTS as of the time of the Exchange.
2.6 Intentions. Except in connection with the proposed CTS
Liquidation, CTS and the CTS Shareholders hereby represent and warrant that
there is no plan or intention by the shareholders of CTS to sell, exchange, or
otherwise dispose of any shares of the Series A Preferred Stock received in the
Exchange.
2.7 Indebtedness. There is no intercorporate indebtedness existing
between Dolgencorp and CTS that was issued, acquired or will be settled at a
discount in connection with this Agreement.
2.8 Court Proceeding. CTS is not under the jurisdiction of a court
in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) under
the Internal Revenue Code of 1986, as amended (the "Code").
2.9 Liquidation and Distribution. CTS shall be promptly liquidated
following the Exchange and the assets of CTS shall be distributed pro rata to
the CTS Shareholders.
3
<PAGE> 4
2.10 Full Disclosure. All the information provided by CTS, the CTS
Shareholders and their respective representatives herein and in the Schedules
attached hereto and made a part hereof are true, correct and complete in all
material respects and no representation, warranty or statement made by CTS or
any of the CTS Shareholders in or pursuant to this Agreement, including but not
limited to, the private letter ruling request and subsequent correspondence
with the Internal Revenue Service, contains any untrue statement of a material
fact or omits to state any material fact necessary to make such representation,
warranty, or statement not misleading.
ARTICLE III
Representations and Warranties of Dollar General
and Dolgencorp
Dollar General and Dolgencorp hereby represent and warrant to CTS and
the CTS Shareholders as of the date of this Agreement as follows:
3.1 Organization; Corporate Authority; Compliance with Law. Each of
Dollar General and Dolgencorp is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Kentucky. Dollar
General and Dolgencorp each have all requisite corporate power and authority to
own, operate and lease their respective properties and assets and to carry on
their businesses as now conducted. Neither Dollar General nor Dolgencorp is in
violation of any order of any court, governmental authority or arbitration
board or tribunal, or any law, ordinance, governmental rule or regulation to
which Dollar General, Dolgencorp or any of their properties or assets are
subject. Dollar General and Dolgencorp have obtained all licenses, permits,
and other authorizations and each has taken all actions required by applicable
law or governmental regulations in connection with its business as now
conducted.
3.2 Authorization, Validity and Effect of Agreement. Each of Dollar
General and Dolgencorp has the requisite corporate power and authority to
execute and deliver this agreement and all agreements and documents
contemplated hereby. The consummation by Dollar General and Dolgencorp of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action. This Agreement constitutes, and all agreements and documents
contemplated hereby will constitute, the valid and legally binding obligations
of Dollar General and Dolgencorp, enforceable and in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principals of
equity.
3.3 No Violation. Neither the execution and delivery by Dollar
General and Dolgencorp of this Agreement, nor the consummation by Dollar
General and Dolgencorp of the transactions contemplated hereby and in
accordance with the terms hereof will: (i) conflict with or result in a breach
of any provisions of the Articles of Incorporation or Bylaws of Dollar General
or Dolgencorp; (ii) conflict with, result in a breach of any
4
<PAGE> 5
provision of or the modification or termination of, constitute a default under,
or result in the creation or imposition of any lien, security interest, charge
or encumbrance upon any of the assets of Dollar General or Dolgencorp pursuant
to any material commitment, lease, contract, or other material agreement or
instrument to which Dollar General or Dolgencorp is a party; or (iii) violate
any order, arbitration award, judgment, writ, injunction, decree, statute,
rule, or regulation applicable to Dollar General or Dolgencorp.
3.4 Reacquisition of Series A Preferred Stock. Neither Dollar General
nor Dolgencorp has any present plan or intention to reacquire any shares of the
Series A Preferred Stock to be issued in the Exchange.
3.5 Disposition of Assets Acquired. Neither Dollar General or
Dolgencorp has any present plan or intention to sell or otherwise dispose of
the Common Stock of Dollar General acquired from CTS in the Exchange, except
for such dispositions made in the ordinary course of business or transfers
described in Section 368(a)(2)(C) of the Code.
3.6 Intercorporate Indebtedness. There is no intercorporate
indebtedness existing between Dolgencorp and CTS that was issued, acquired, or
will be settled at a discount in connection with this Agreement.
3.7 Investment Companies. Neither Dollar General nor Dolgencorp is
an investment company as defined in Section 368(a)(2)(F)(iii) and (iv) of the
Code.
3.8 Ownership of CTS Capital Stock. Dolgencorp does not own,
directly or indirectly, nor has it owned during the preceding five years,
directly or indirectly, any capital stock of CTS.
3.9 Issuance of Common Stock Upon Conversion. Dollar General
represents that all shares of Common Stock that shall be issuable upon
conversion of the Series A Preferred Stock pursuant to and in accordance with
the Articles of Amendment attached hereto as Exhibit A, have been duly
authorized and are reserved for issuance and, when issued upon such conversion,
shall be validly issued, fully paid and nonassessable.
ARTICLE IV
Covenants
4.1 Certain Legal Proceedings. In the event of any claim, action,
suit, investigation or other proceedings by any governmental entity or other
person is commenced which questions the validity or legality of the Exchange or
any of the other transactions contemplated hereby or seeks damages in
connection therewith, the parties agree to cooperate with each other and use
their best efforts to defend against such claim, action, suit, investigation or
other proceeding, and if an injunction or other order is issued in any such
action, suit or other proceeding, to use their respective best efforts to have
such injunction or
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<PAGE> 6
such order lifted, and to cooperate reasonably regarding any other impediment
to the consummation of the transactions contemplated by this Agreement.
4.2 Expenses. CTS and the CTS Shareholders covenant that all out of
pocket costs and expenses (including, but not limited to, attorneys' fees,
financial advisor fees, fees and expenses of the Compensation Committee of the
Board of Directors) incurred by Dollar General, Dolgencorp and CTS in
connection with this Agreement and the transactions contemplated hereby shall
be paid by CTS, and the CTS Shareholders, jointly and severally, agree to pay
all such expenses not paid by CTS prior to the CTS Liquidation.
4.3 Reservation of Common Stock. Dollar General shall at all times
reserve and keep available out of its authorized Common Stock solely for the
purpose of issuance upon conversion of the Series A Preferred Stock as provided
for in the Articles of Amendment to the Restated Articles of Incorporation of
Dollar General, such number of shares of Common Stock as shall then be issuable
upon the conversion of all outstanding shares of Series A Preferred Stock.
4.4 Market Listing. Dollar General shall cause the Common Stock to be
issued upon conversion of the Series A Preferred Stock to be authorized for
listing on the national securities exchange or market on which the Dollar
General Common Stock is then listed, if applicable, upon official notice of
issuance.
ARTICLE V
Indemnification
5.1 Indemnification by CTS and the CTS Shareholders. CTS and the CTS
Shareholders, jointly and severally (the "Indemnitors"), hereby agree to
defend, indemnify and hold harmless Dollar General, Dolgencorp and each of
their directors, officers, agents, affiliates, representatives, successors and
assigns (the "Indemnified Persons") and shall reimburse the Indemnified Persons
for, from and against each claim, loss, liability, cost and expense (including
without limitation, interest, penalties, costs of preparation and
investigation, and the reasonable fees, disbursements and expenses of
attorneys, accountants and other professional advisors) collectively,
("Losses"), directly or indirectly relating to, resulting from or arising out
of this Agreement and consummation of the transactions contemplated hereby in
accordance with the terms hereof, except for Losses directly resulting from the
gross negligence or wilful misconduct of the Indemnified Persons.
5.2 Procedure. The Indemnified Persons shall promptly notify the
Indemnitors of any claim, demand, action or proceeding for which
indemnification will be sought under 5.1 of this Agreement, and if such claim,
demand, action or proceeding is a third party claim, demand, action or
proceeding, the Indemnitors will have the right, at their expense, to assume
the defense thereof using counsel reasonably acceptable to the Indemnified
Persons. The Indemnified Persons shall have the right to participate, at their
own expense, with
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<PAGE> 7
respect to any third party claim, demand, action or proceeding. In connection
with any such third party claim, demand, action or proceeding, CTS, the CTS
Shareholders and the Indemnified Persons shall cooperate with each other and
provide each other with access to relevant books and records in their
possession. No such third party claim, demand, action or proceeding shall be
settled by the Indemnitors or the Indemnified Person without the prior written
consent of the Indemnified Persons, on the one hand, or the Indemnitors, as the
other hand. If a written offer is made to settle any such third party claim,
demand, action or proceeding and the Indemnitors propose to accept such offer
of settlement and the Indemnified Persons refuse to consent to such settlement,
then: (i) the Indemnitors shall be excused from, and the Indemnified Parties
shall be solely responsible for all further defense of such third party claim,
demand, action or proceeding; and (ii) the maximum liability of the Indemnitors
relating to such third party claim, demand, action or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from the
Indemnified Persons upon such third party claim, demand, action or proceeding
is greater than the amount of the proposed settlement.
ARTICLE VI
Survival of Representations
6.1 Survival of Representations: All representations, warranties,
covenants and agreements by the parties contained in this Agreement shall
survive the closing and any investigation at any time made by or on behalf of
any party hereto.
6.2 Statements as Representations. All statements contained in any
certificate, schedule, list, document or other writing delivered pursuant
hereto or in connection with the transactions contemplated hereby shall be
deemed representations and warranties for purposes of this Agreement.
6.3 Remedies Cumulative. The remedies provided herein shall be
cumulative and shall not preclude the assertion of any party hereof of any
other rights or the seeking of any other remedies against the other parties
hereto.
ARTICLE VII
Miscellaneous
7.1 Entire Agreement; Amendments. This Agreement, including the
exhibits, schedules, lists and other documents and writings referred to herein
or delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to the subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes
all prior agreements and understandings between the parties with respect to the
subject matter. This Agreement may be amended only by a written instrument
duly executed
7
<PAGE> 8
by all parties or their respective heirs, successors, assigns or legal personal
representatives. Any condition to a party's obligations hereunder may be
waived but only by a written instrument signed by the party entitled to the
benefits thereof. Failure or delay of any party at any time or times to
require performance of any provision or to exercise its rights with respect to
any provision hereof, shall in no manner operate as a waiver of or affect such
party's right at a later time to enforce the same.
7.2 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
7.3 Severability. The invalidity of any term or terms of this
Agreement shall not affect any other term of this Agreement which shall remain
in full force and effect.
7.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed (registered or certified mail, postage
prepaid, return receipt requested) as follows:
If to Dollar General Corporation:
Dollar General Corporation
104 Woodmont Boulevard, Suite 500
Nashville, Tennessee 37205
Attention: Bob R. Carpenter
Copy to:
Bass, Berry & Sims
2700 First American Center
Nashville, Tennessee 37238
Attention: James H. Cheek, III
If to Dolgencorp:
Dolgencorp, Inc.
427 Beech Street
Scottsville, Kentucky
Attention: Bob R. Carpenter
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<PAGE> 9
Copy to:
Bass, Berry & Sims
2700 First American Center
Nashville, Tennessee 37238
Attention: James H. Cheek, III
If to CTS:
CTS, Inc.
104 Woodmont Blvd., Suite 355
Nashville, Tennessee 37205
Attention: Cal Turner, Jr.
Copy to:
Sherrard & Roe
424 Church Street, Suite 2000
Nashville, Tennessee 37219-2319
Attention: Thomas J. Sherrard
If to the CTS Shareholders:
Turner Children Trust
104 Woodmont Blvd., Suite 355
Nashville, Tennessee 37205
Attention: Juette Day
Cal Turner Family Foundation
104 Woodmont Blvd., Suite 355
Nashville, Tennessee 37205
Attention: Juette Day
Turner Foundation for Lindsey Wilson College, Inc.
210 Lindsey Wilson College Road
Columbia, Kentucky 42728
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
6.5 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Kentucky, without
regard to its conflict of laws rules.
9
<PAGE> 10
6.6 Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, with the same effect as if the signatories executing
the several counterparts had executed one counterpart, provided, however, that
the several executed counterparts shall have been signed by Dollar General,
Dolgencorp, and CTS. Also, its counterparts together shall constitute one and
the same instrument.
10
<PAGE> 11
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of Dollar General, Dolgencorp, CTS
and by the CTS Shareholders on the date first above written.
DOLLAR GENERAL CORPORATION
By: /s/ Bob Carpenter
---------------------------
Title: VP - CAO
------------------------
DOLGENCORP, INC.
By: /s/ C. Kent Garner
---------------------------
Title: VP and Treasurer
------------------------
CTS, INC.
By: /s/ Cal Turner, Jr.
---------------------------
Title: President
------------------------
SHAREHOLDERS OF CTS, INC.:
Turner Children Trust Dated
January 21, 1980
By: /s/ Cal Turner, Jr.
---------------------------
Title: Trustee
------------------------
-------------------------------
Cal Turner Family Foundation
By: /s/ Cal Turner, Jr.
---------------------------
Title: Trustee
------------------------
-------------------------------
Turner Foundation for
Lindsey Wilson College, Inc.
By: /s/ Cal Turner, Jr.
---------------------------
Title: Trustee
------------------------
11
<PAGE> 1
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of August 22, 1994 by and
between Dollar General Corporation (the "Company") and the Turner Children
Trust dated January 21, 1980 (the "Trust"), a certain holder of the Company's
Series A Convertible Junior Preferred Stock, and the immediate beneficiaries of
the Trust as set forth on the signature page hereto (collectively the "Series A
Holders").
WHEREAS, as of the date of this Agreement, the Trust owns 1,613,742
shares of the Company's Series A Convertible Junior Preferred Stock (the
"Series A Preferred Stock");
WHEREAS, the Board of Directors has authorized the officers of the
Company to prepare and execute this Agreement, in the name and on behalf of the
Company, to offer certain registration rights to the Series A Holders, the
acceptance of which shall be evidenced by their execution of this Agreement;
NOW, THEREFORE, the Company and the Holders agree as follows:
1. Definitions - As used in this Agreement, the following terms
shall have the following meanings:
"Registrable Securities" means the Common Stock, $.50 par
value per share, received by the Series A Holders upon conversion of the Series
A Preferred Stock, pursuant to the terms set forth in the Articles of Amendment
designating the Series A Preferred Stock, until such time as such Common Stock
is saleable pursuant to Rule 144(k) promulgated under the Securities Act. For
purposes of this Agreement, a Registrable Security ceases to be a Registrable
Security when (x) it has been effectively registered under the Securities Act
and sold or distributed to the public in accordance with an effective
registration statement covering it, or (y) it is sold, distributed or otherwise
disposed of pursuant to Rule 144 (or any successor or similar provision) under
the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
2. Demand Registration. (a) Subject to the terms and conditions
set forth herein, if at any time the executor or administrator of the estate of
a Series A Holder shall request the Company in writing to register under the
Securities Act all or a part of the Registrable Securities held by such Series
A Holder (a "Demand Registration"), the Company shall use all reasonable
efforts to cause to be filed and declared effective as soon as reasonably
practicable a registration statement, on such appropriate short registration
form as the Company in its discretion shall determine (Form S-3 or any future
equivalent thereof), providing for the sale of all of such Registrable
Securities by such Series A Holder; provided, however, that such requests shall
express the present intention of the Series A Holder(s) to offer or cause the
offering of such Registrable Securities for distribution in an underwritten
public offering thereof. Each
<PAGE> 2
registration statement filed pursuant to this Section 2(a) is hereinafter
referred to as a "Demand Registration Statement."
The Company's obligation to use all reasonable efforts to
cause Registrable Securities to be registered in accordance with this Section
2(a) is subject to each of the following limitations, conditions and
qualifications:
(i) The Company may postpone for a reasonable period
of time, the filing or the effectiveness of a registration
requested pursuant to this Section 2(a) if the Company
determines that (A) such registration might have an adverse
effect on any plan or proposal by the Company or any of its
subsidiaries with respect to any financing, acquisition,
recapitalization, reorganization or other material transaction
or (B) the Company is in possession of material non-public
information and disclosure of such information is not in the
best interests of the Company or any of its subsidiaries;
provided, however, that as soon as the conditions permitting
such delay are no longer applicable, the Company shall give
notice of that fact to the executor or administrator of the
estate of such requesting Series A Holder, and shall proceed
with the registration unless the executor or administrator
shall have elected, at any time prior to the close of business
on the tenth business day after the Company has so notified
the executor or administrator, to withdraw their request for
registration, and such withdrawn request shall not constitute
a request hereunder.
(ii) The Company shall not be required to effect any
registration pursuant to this Section 2(a) unless such
registration relates to Registrable Securities which may be
registered in a registration statement on Form S-3 (or any
future equivalent thereof) and represent a market value of
$3,000,000 as of the date immediately preceding the filing of
a registration statement with the SEC.
(iii) The obligations of the Company to register
Registrable Securities pursuant to this Section 2(a) shall
expire with respect to each Series A Holders' estate after one
Demand Registration Statement filed by reason of a request
pursuant to Section 2(a) shall have become effective and
remained effective for the period specified in Section
3(a)(ii) hereof.
(b) The Company agrees that, except as otherwise
permitted by Section 2(d) hereof, it will not effect any public sale or
distribution (or any registration with respect thereto) of any of its Common
Stock during a period beginning on the twenty-fifth day prior to, and ending on
the earlier of the fifteenth day after, the date such Demand Registration
Statement is declared effective or the date when attempts to effect such
registration are abandoned by or at the request of the executor or
administrator of the estate holding the Registrable Securities (the "Hold-Back
Period").
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<PAGE> 3
(c) The Company shall have the right to select any
recognized investment banking firm(s) to administer the offering.
(d) The Company and, at the Company's sole election, any
other estate of a Series A Holder of Registrable Securities, may include in any
registration requested pursuant to Section 2(a) any shares of Common Stock
which it or they shall determine so to include (the "Additional Registrable
Securities") and the consent of the Series A Holders shall not be required with
respect thereto; provided, however, that, if, in the opinion of the managing
underwriter of such offering, the inclusion in such registration statement of
all Additional Registrable Securities would materially interfere with the
successful marketing of the Series A Holders' Registrable Securities, then the
number of the Additional Registrable Securities shall be reduced to such
number, if any, that, in the opinion of such managing underwriter(s), can be
included in such underwriting without such interference with the successful
marketing of the Series A Holders' Registrable Securities.
(e) In a Demand Registration pursuant to this Agreement,
the Registrable Securities of the requesting executor or administrator of the
estate of a Series A Holder shall be the first shares included in such
registration statement and no other shares of the Company's securities shall be
included if, in the opinion of the managing underwriter(s) of such offering,
the inclusion of the additional securities would materially interfere with the
registration and sale of the Series A Holder's Registrable Securities. If, in
the opinion of the managing underwriter(s) of any offering, the distribution of
a specified portion of the Series A Holders' shares would materially interfere
with the registration and sale, in accordance with the intended method thereof,
then the number of Series A Holders' shares to be included in such registration
statement shall be reduced to such number, if any, that, in the opinion of such
managing underwriter(s), can be included without such interference. If, as a
result of the cutback provisions of the preceding sentence, any estate of a
Series A Holder is not entitled to include all of such Series A Holder's shares
in such registration, such Series A Holder may elect to withdraw its request to
include such Series A Holders' shares in such registration (a "Withdrawal
Election"); provided, however, that a Withdrawal Election shall be irrevocable
and such Series A Holder shall no longer have any right to include any shares
in the registration as to which such Withdrawal Election was made.
(f) As a condition to each Series A Holder's right to
include shares in a registration pursuant to this Section, such Series A Holder
shall, if requested by the Company or the managing underwriter(s) in connection
with such registration and distribution, (A) agree to sell the shares on the
basis provided in any underwriting arrangements entered into in connection
therewith and (B) complete and execute all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents which are customary in
similar transactions and required under the terms of such underwriting
arrangements.
3. Registration Procedures. (a) Whenever the Company is
required to use all reasonable efforts to effect the registration of any
Registrable Securities under the Securities Act pursuant to the terms and
conditions of Section 2(a) (such Registrable Securities being
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<PAGE> 4
hereinafter referred to as the "Subject Shares"), the Company will use all
reasonable efforts to effect the registration of the Subject Shares in
accordance with the intended method of disposition thereof. Without limiting
the generality of the foregoing and provided the Company is eligible to
register the subject shares pursuant to Form S-3 (or the future equivalent
thereof), the Company will as soon as practicable:
(i) prepare and file with the SEC a registration
statement on Form S-3 (or any future equivalent thereof) under
the Securities Act with respect to the Subject Shares and use
all reasonable efforts to cause such registration statement to
become effective;
(ii) prepare and file with the SEC such amendments
and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to
keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the
disposition of all Subject Shares and other securities covered
by such registration statement until the earlier of (A) such
time as all of such Subject Shares and other securities have
been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such
registration statement and (B) the expiration of 30 days after
such registration statement becomes effective; provided, that,
if the offering of Subject Shares pursuant to such
registration statement is terminated or suspended by any stop
order, injunction or other order or requirement of the SEC or
any other governmental agency or court, the foregoing time
period shall be extended by the number of days during the
period from and including the date such stop order, injunction
or other order or requirement becomes effective to and
including the date when such termination or suspension no
longer exists;
(iii) furnish the Series A Holder(s) of the
Subject Shares covered by such registration statement, without
charge, such number of conformed copies of such registration
statement and of each such amendment and supplement thereto
(in each case without exhibits unless specifically requested),
such number of copies of the prospectus included in such
registration statement (including each preliminary
prospectus), such documents incorporated by reference in such
registration statement or prospectus, and such other
documents, as such Series A Holder(s) may reasonably request;
(iv) use all reasonable efforts to register or
qualify the Subject Shares covered by such registration
statement under the securities or blue sky laws of such
jurisdictions as the managing underwriter(s) shall reasonably
recommend, and do any and all other acts and things which may
be reasonably necessary or advisable to enable the Series A
Holder(s) to consummate the disposition in such jurisdictions
of the Subject Shares covered by such registration statement,
except that the Company shall not for any such purpose be
required to (A) qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so
4
<PAGE> 5
qualified, (B) subject itself to taxation in any such
jurisdiction wherein it is not so subject, or (C) consent to
general service of process in any such jurisdiction or
otherwise take any action that would subject it to the general
jurisdiction of the courts of any jurisdiction in which it is
not so subject;
(v) otherwise use all reasonable efforts to comply with
all applicable rules and regulations of the SEC;
(vi) furnish, at the Company's expense, unlegended
certificates representing ownership of the securities being
sold in such denominations as shall be requested and instruct
the transfer agent to release any stop transfer orders with
respect to the Subject Shares being sold;
(vii) notify each participating Series A Holder at any
time when a prospectus relating to the Subject Shares is
required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus
included in such Registration Statement contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein (in the case of the
prospectus or any preliminary prospectus, in light of the
circumstances under which they were made) not misleading, and
the Company will, as promptly as practicable thereafter,
prepare and file with the SEC and furnish a supplement or
amendment to such prospectus so that, as thereafter delivered
to the purchasers of Subject Shares, such prospectus will not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(viii) enter into customary agreements (including an
underwriting agreement in customary form in the case of an
underwritten offering); make such representations and
warranties to the Series A Holder(s) and underwriter(s) (in
the case of underwritten offerings) in form, substance and
scope as are customarily made by issuers to sellers or
underwriter(s) in similar offerings;
(ix) make available for inspection by the Series A
Holder(s), any underwriter or agent participating in any
disposition pursuant to such Registration Statement, and any
attorney, accountant or other similar professional advisor
retained by any such Series A Holder(s), underwriter(s) or
agents (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records"), as
shall be reasonably necessary to enable them to exercise their
due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection with
such Registration Statement. The Series A Holders agree that
Records and other information which the Company determines to
be confidential and of which determination the Inspectors are
so notified shall not be disclosed by the Inspectors unless
(i) the
5
<PAGE> 6
release of such Records is ordered pursuant to a subpoena,
court order or regulatory or agency request or (ii) the
information in such Records has been generally disseminated to
the public. Each Series A Holder agrees that it will, upon
learning that disclosure of such Record is sought in a court
of competent jurisdiction or by a governmental agency, give
notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure
of the Records deemed confidential;
(x) make available to its security holders earnings
statements, which need not be audited, satisfying the
provisions of Section 11(a) of the Securities Act no later
than 90 days after the end of the 12-month period beginning
with the first month of the Company's first quarter commencing
after the effective date of the Registration Statement, which
earnings statements shall cover said 12 month period;
(xi) make every reasonable effort to prevent the issuance
of any stop order suspending the effectiveness of the
registration statement or of any order preventing or
suspending the effectiveness of such registration statement at
the earliest possible moment;
(xii) cause the Subject Shares to be registered with or
approved by such other governmental agencies or authorities
within the United States as may be reasonably necessary to
enable the sellers or the underwriter(s) to consummate the
disposition of such securities;
(xiii) cooperate with the holders of the Registrable
Securities and the managing underwriter(s), or any other
interested party (including any interested broker-dealer) in
making any filings or submission reasonably required to be
made, and the furnishing of all appropriate information in
connection therewith, with the National Association of
Securities Dealers, Inc. ("NASD");
(xiv) effect the listing of the Subject Shares on the
Nasdaq National Market or other national securities exchange
on which shares of the Company's Common Stock shall then be
listed; and
(xv) take all other steps necessary to effect the
registration of the Subject Shares contemplated hereby.
(b) The Series A Holders shall provide (in writing and
signed by the Series A Holder(s) and stated to be specifically for use in the
related registration statement, preliminary prospectus, prospectus or other
document incident thereto) all such information and materials, including
without limitation, the intended plan of distribution, and take all such action
as may be required in order to permit the Company to comply with all applicable
requirements of the SEC and any applicable state securities laws and to obtain
any desired acceleration of the
6
<PAGE> 7
effective date of any registration statement prepared and filed by the Company
pursuant to this Agreement.
(c) Each Series A Holder agrees, that if the managing
underwriter so requires, whether or not any of such Series A Holder's
Registrable Securities are included in such registration, not to effect any
sale or distribution, including any sale pursuant to Rule 144 of the Securities
Act, of any securities of the Company which are similar to the securities
included in such registration (other than as part of the underwritten
offering), without the consent of the managing underwriter(s), for a period of
120 days after the date a request for registration is made pursuant to Section
2(a) hereof; provided, however, that if the registration statement filed in
connection therewith becomes effective within such 120-day period, such 120-day
period shall be extended for such period as may be required pursuant to the
terms and conditions of any underwriting agreement entered into in connection
with such proposed registration.
(d) The Series A Holder(s) shall, if requested by the
Company or the managing underwriter(s) in connection with any proposed
registration and distribution pursuant to this Agreement, (i) agree to sell the
Subject Shares on the basis provided in any underwriting arrangements entered
into in connection therewith and (ii) complete and execute all questionnaires,
powers of attorney, indemnities, underwriting agreement and other documents
customary in similar offerings.
(e) Upon receipt of any notice from the Company that the
Company has become aware that the prospectus (including any preliminary
prospectus) included in any registration statement filed pursuant to Section
2(a) hereof, as then in effect, contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, the Series A Holder(s)
shall forthwith discontinue disposition of Subject Shares pursuant to the
registration statement covering the same until the Series A Holders' receipt of
copies of a supplemented or amended prospectus and, if so directed by the
Company, deliver to the Company all copies other than permanent file copies
then in the Series A Holder's possession, of the prospectus covering the
Subject Shares that was in effect prior to such amendment or supplement.
(f) The Company shall pay all out-of-pocket expenses
incurred in connection with the Demand Registration Statement for each of the
Series A Holders filed pursuant to Section 2(a) of this Agreement, except as
otherwise set forth in this paragraph. Such expenses shall include, without
limitation, all SEC and blue sky registration and filing fees (including NASD
fees), printing expenses, transfer agents and registrars' fees, fees and
disbursements of the Company's counsel and accountants and fees and
disbursements of experts used by the Company in connection with such
registration statement. Series A Holders shall pay all underwriting discounts,
commissions and expenses attributable to the Subject Shares sold pursuant to
all registration statements and the fees and expenses of their legal counsel
and any other advisors.
7
<PAGE> 8
4. Conditions Precedent to Registration. The Company's
obligations under this Agreement to effect the registration of any Registrable
Securities are subject to the agreement to and the performance by the holders
of such Registrable Securities of the obligations of such Series A Holder(s)
contained in this Agreement. Unless a Series A Holder shall, if requested by
the Company, complete, execute and deliver all agreements, questionnaires,
indemnities and other documents customary in a proposed registration or deemed
necessary by the Company to evidence such Series A Holder's agreements and
obligation under this Agreement, the Company will have no obligation to
register such Series A Holder's Registrable Securities.
5. Notices. Any notice or other communication required
or permitted to be given hereunder shall be in writing and shall be effective
(a) upon hand delivery or delivery by telex (with correct answer back
received), telecopy or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is
to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the first business day following the date
of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual service, fully prepaid, addressed to such address, or
upon actual receipt of such mailing whichever shall first occur. The addresses
for such communications shall be:
If to the Company:
Dollar General Corporation
104 Woodmont Blvd.
Suite 500
Nashville, TN 37205
Attention: Bob R. Carpenter
with a copy to:
Bass, Berry & Sims
First American Center, 27th Floor
Nashville, TN 37238
Telecopy: (615)742-6293
Attention: James H. Cheek, III
If to a Series A Holder,
to the address of such Series A Holder shown on the stock
ledger books of the Company.
8
<PAGE> 9
with a copy to:
Sherrard & Roe
424 Church Street, Suite 2000
Third Financial Center
Nashville, TN 37219-2319
Attention: Thomas J. Sherrard
The Company may from time to time change its address for
notices under this Section 5 by giving at least 10 days' written notice of such
changed address to each of the Series A Holders. Each Series A Holder may from
time to time change its address for notices under this Section 5 by giving at
least 10 days' written notice of such changed address to the Company.
6. Heading. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
7. Binding Effect; Amendments. This Agreement shall be
binding upon and inure to the benefit of the Company and the Series A Holders;
provided, however, that the Company may amend, modify, or supplement this
Agreement at any time without the consent of the Series A Holders if it
determines that such action is in the best interests of the Company and its
shareholders as a whole.
8. No Third Party Beneficiaries. This Agreement is
intended for the benefit of the Company and the Series A Holders and is not for
the benefit of, nor may any provision hereof be enforced by, any other person.
9. Expiration Date. This Agreement shall expire on
August 22, 1997.
10. Governing Law. Upon acceptance by the Series A
Holders, this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Tennessee, without regard to
the principles of conflicts of laws.
9
<PAGE> 10
IN WITNESS WHEREOF, this Agreement has been executed by the
Company's duly authorized officer, the Trust's duly authorized Trustee(s) and
each of the immediate beneficiaries of the Trust, each as of the date hereof.
DOLLAR GENERAL CORPORATION
By: /s/ Bob Carpenter
---------------------------------------
Name: Bob Carpenter
-------------------------------------
Title: VP - CAO
------------------------------------
SERIES A HOLDERS:
TURNER CHILDREN TRUST
DATED JANUARY 21, 1980
By: /s/ James Stephen Turner
---------------------------------------
Title: Trustee
------------------------------------
BENEFICIARIES OF THE TURNER CHILDREN TRUST
DATED JANUARY 21, 1980
/s/ Cal Turner, Jr.
-------------------------------------------
Cal Turner, Jr.
/s/ James Stephen Turner
-------------------------------------------
James Stephen Turner
/s/ Laura Turner Dugas
-------------------------------------------
Laura Turner Dugas
/s/ Betty Turner Campbell
-------------------------------------------
Elizabeth Turner Campbell
10
<PAGE> 1
EXHIBIT 99.1
Media Contact: Cabot Pyle Investor Contact: Kent Garner
(615) 783-2028 (615) 783-2003
DOLLAR GENERAL STABILIZES BLOCK OF COMMON STOCK
August 22, 1994, Nashville, TN -- Dollar General Corporation (Nasdaq: DOLR)
announced today that its board of directors approved a transaction which will
stabilize a significant block of the common stock of the Company and provide a
cash flow benefit to the Company. The transaction will have no effect on the
Company's earnings per share.
Chairman, President and CEO Cal Turner, Jr. made the announcement saying,
"Stabilizing this block of common stock owned by the Turner family accomplishes
two very important things. First, it should help alleviate any market
uncertainty concerning the disposition of the significant block of the
Company's common stock held by our family. Second, it serves to further
strengthen our family's commitment to the Company for the long term."
The transaction, which was closed today, took the form of an exchange of
1,715,742 shares of a previously authorized but unissued series of Dollar
General convertible preferred stock for the 8,578,710 shares of Dollar General
common stock owned by CTS, Inc., a personal holding company controlled by
members of the Turner family, the founders of Dollar General.
Through CTS, members of the Turner family control 16.2% of the voting power of
the Company's common stock. As preferred stock holders, the Turner family will
continue to have the same voting power with the common stock on all matters.
This transaction, negotiated and recommended by a special committee of
independent members of Dollar General's board of directors, came in response to
a request to the board of directors from CTS to consider a transaction which
meets certain estate planning needs of the Turner family.
The board of directors retained Equitable Securities Corporation of Nashville,
Tennessee, as financial advisor to review the transaction on behalf of the
special committee and the board of directors. In the opinion of Equitable
Securities, the transaction is fair from a financial point of view to the
non-CTS shareholders of Dollar General. In addition, Dollar General's
independent auditors, Coopers & Lybrand, confirmed to the board of directors
that the attached pro forma financial statements reflect the appropriate
adjustment resulting from this transaction, and that there is no reduction in
total shareholders' equity or earnings per share.
To stabilize this block of stock, terms of the exchange agreement between
Dollar General and CTS state that the shares of the preferred stock generally
have no right to convert to common stock during the first two years following
the exchange. During the succeeding three years, the preferred stock may be
converted by the holders at graduated rates less than the original 5:1
exchange ratio subject to adjustment for stock dividends or splits.
Additionally, the transferability of the preferred stock is restricted to the
three original CTS shareholders and the current direct beneficiaries of one
such shareholder, the Turner Children Trust. An annual cash flow benefit to
Dollar General will be realized because holders of the preferred stock will
receive only 90% of the cash dividend payable on the common stock.
Dollar General is a chain of 1,893 neighborhood stores operating in 24 states
with distribution centers in Kentucky and Georgia. The Company's common stock
is traded on the Nasdaq National Market System.
PRO FORMA FINANCIAL STATEMENTS TO FOLLOW
<PAGE> 2
DOLLAR GENERAL CORPORATION
PRO FORMA INCOME STATEMENTS
For six months ended July 31, 1994
(000)
(unaudited)
July 31, 1994
As Adjusted For
Reported Transaction Difference
-------- ----------- ----------
Sales* $604,409 100.00% $604,409 100.00% $ 0
Cost of Sales 436,721 72.26% 436,721 72.26% 0
-------- ------ -------- ------ -------
LIFO Gross Margin 167,688 27.74% 167,688 27.74% 0
Operating Expenses 128,940 21.33% 128,940 21.33% 0
Operating Income 38,748 6.41% 38,748 6.41% 0
Interest Expense 1,039 0.17% 1,039 0.17% 0
-------- ------ -------- ------ -------
Pre-Tax Income 37,709 6.24% 37,709 6.24% 0
Taxes 14,235 2.36% 14,235 2.36% 0
-------- ------ -------- ------ -------
Net Income $ 23,474 3.88% $ 23,474 3.88% $ 0
======== ====== ======== ====== =======
Net Income per share $0.43 $0.43
======== ========
Weighted Average
Shares Outstanding 54,914 54,914
======== ========
* Includes franchise stores sales of $1,881 in 1994.
<PAGE> 3
DOLLAR GENERAL CORPORATION
PRO FORMA BALANCE SHEETS
As of July 31, 1994
(000)
(Unaudited)
<TABLE>
<CAPTION>
July 31, 1994
As Adjusted for
Reported Transaction Difference
------------ ------------- ----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 26,764 $ 26,850 $ 86
Merchandise inventories 332,551 332,551 0
Deferred income taxes 10,808 10,808 0
Other current assets 10,757 10,757 0
Income taxes 2,215 2,215 0
----------- ----------- ---------
TOTAL CURRENT ASSETS 383,095 383,181 86
Property & equipment, at cost 147,779 147,779 0
Less: Accumulated depreciation (54,580) (54,580) 0
----------- ----------- ---------
93,199 93,199 0
Other assets 4,719 4,719 0
----------- ----------- ---------
TOTAL ASSETS $ 481,013 $ 481,099 $ 86
=========== =========== =========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,303 $ 1,303 $ 0
Short-term borrowings 62,000 62,000 0
Accounts payable 91,515 91,515 0
Accrued expenses 49,418 49,418 0
Income taxes 0 0 0
----------- ----------- ---------
TOTAL CURRENT LIABILITIES 204,236 204,236 0
Long-term debt 4,669 4,669 0
Deferred income taxes 2,563 2,563 0
----------- ----------- ---------
TOTAL LIABILITIES 211,468 211,468 0
Shareholders' equity:
Preferred stock 0 858 858
Common stock 27,248 27,248 0
Additional paid-in capital 75,372 271,824 196,452
Retained earnings 169,308 169,394 86
----------- ----------- ---------
271,928 469,324 197,396
Less: Treasury stock (2,383) (199,693) (197,310)
----------- ----------- ---------
TOTAL STOCKHOLDERS' EQUITY 269,545 269,631 86
----------- ----------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 481,013 $ 481,099 $ 86
=========== =========== =========
</TABLE>
<PAGE> 4
DOLLAR GENERAL CORPORATION
PRO FORMA STATEMENTS OF CASH FLOWS
For the six months ended July 31, 1994
(Unaudited)
(000)
<TABLE>
<CAPTION>
As Adjusted for
Reported Transaction Difference
-------- ----------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Income $ 23,474 $ 23,474 $ 0
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 7,805 7,805 0
Deferred income taxes (1,144) (1,144) 0
Change in operating assets and liabilities:
Merchandise inventories (72,509) (72,509) 0
Accounts payable 10,475 10,475 0
Accrued expenses 1,512 1,512 0
Income taxes (652) (652) 0
Other (2,021) (2,021) 0
--------- ---------- ----------
Net cash provided (used) by operating activities (33,060) (33,060) 0
--------- ---------- ----------
Cash flows (used) in investing activities:
Purchase of property and equipment (23,852) (23,852) 0
--------- ---------- ----------
Net cash (used) by investing activites (23,852) (23,852) 0
--------- ---------- ----------
Cash flows provided (used) by financing activities:
Issuance of short-term borrowings 44,000 44,000 0
Repayments of short-term borrowings 0 0 0
Repayments of long-term debt (1,040) (1,040) 0
Payments of cash dividends (5,333) (5,247) 86
Proceeds from exercise of stock options 5,899 5,899 0
Tax effect of stock options 4,785 4,785 0
Other 0 0 0
--------- ---------- ----------
Net cash provided by financing activities 48,311 48,397 86
--------- ---------- ----------
Net increase (decrease) in cash and cash equivalents (8,601) (8,515) 86
Cash and cash equivalents beginning of period 35,365 35,365 0
--------- ---------- ----------
Cash and cash equivalents end of period $ 26,764 $ 26,850 $ 86
========= ========== ==========
</TABLE>
