Document:

Exhibit
10.4

 

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-à-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.

 

3.             Transferability
of Stock.

 

(a)           The
Management Stockholder agrees that he or she will not transfer any shares of
Stock at any time during the period commencing on the date hereof and ending on
the fifth anniversary of the Closing Date; provided, however,
that during such period, the Management Stockholder may transfer shares of
Stock during such time pursuant to one of the following exceptions: (i) transfers
permitted by Sections  5 or 6; (ii) transfers permitted by
clauses (2), (3) and (4) of Section 2(a); (iii) a sale
of shares of Common Stock pursuant to an effective registration statement under
the Act filed by the Company upon the proper exercise of registration rights of
such Management Stockholder under Section 9 (excluding any registration on
Form S-8, S-4 or any successor or similar form); (iv) transfers
permitted pursuant to the Sale Participation Agreement (as defined in Section 7(b));  (v) transfers permitted by the Board or (vi) transfers
to Parent or its designee (any such exception, a “Permitted Transfer”).  In addition, during the period commencing on
the fifth anniversary of

 

 

5

 

the Closing Date through the earlier of a Change of Control or
consummation of a Qualified Public Offering, the Management Stockholder may
only transfer shares of Stock in compliance with Section 4.

 

(b)           Notwithstanding
anything to the contrary herein: (i) Section 3(a) shall
terminate and be of no further force or effect upon the occurrence of a Change
in Control and (ii) upon the occurrence of any sale or other disposition
of any percentage of limited partnership units of Parent held by the Sponsors
or their Affiliates who are limited partners of Parent, the restrictions on
transfer of shares of Common Stock contained in Section 3(a) shall
cease to be of any further force or effect with respect to the percentage of
shares of Common Stock held by the Management Stockholder Entities equal to
quotient of the number of limited partnership units of Parent sold or disposed
of by the Sponsors or such Affiliates in such transaction divided by the
aggregate number of Limited Partnership Units owned by the Sponsors or such
Affiliates prior to such transaction, and for the avoidance of doubt, such
transfer restrictions shall continue to apply to the remaining shares of Common
Stock held by the Management Stockholder Entities.

 

(c)           No
transfer of any such shares in violation hereof shall be made or recorded on
the books of the Company and any such transfer shall be void ab initio and of
no effect.

 

(d)           Notwithstanding
anything to the contrary herein, Parent may, at any time and from time to time,
waive the restrictions on transfers contained in Section 3(a), whether
such waiver is made prior to or after the transferee has effected or committed
to effect the transfer, or has notified the Investors of such transfer or
commitment to transfer.  Any transfers
made pursuant to such waiver or which are later made subject to such a waiver
shall, as of the date of the waiver and at all times thereafter, not be deemed
to violate any applicable restrictions on transfers contained in this
Agreement.

 

4.             Right
of First Refusal.

 

(a)           If,
at any time after the fifth anniversary of the Closing Date and prior to the
earlier to occur of a Change of Control or consummation of a Qualified Public
Offering, the Management Stockholder proposes to transfer any or all of the
Management Stockholder’s Stock to a third party (any such third party, the “ROFR
Transferee”) (other than any transfer pursuant to clauses (1), (2),
(3), (4) or (5) of Section 2(a), to the extent made to a third
party), the Management Stockholder shall notify the Company in writing of the
Management Stockholder’s intention to transfer such Stock (such written notice,
a “ROFR Notice”).  The ROFR Notice
shall include a true and correct description of the number of shares of Stock
to be transferred and the material terms of such proposed transfer and a copy
of any proposed documentation to be entered into with any ROFR Transferee in
respect of such transfer) and shall contain an irrevocable offer to sell such
Stock to the Company or its designees (as provided below) (in the manner set
forth below) at a purchase price equal to the minimum price at which the
Management Stockholder proposes to transfer such Stock to any ROFR Transferee
and on substantially the same terms and conditions as the proposed
transfer.  At any time within twenty (20)
days after the date of the receipt by the Company of the ROFR Notice, the
Company shall have the right and option to purchase, or to arrange for a
subsidiary, third party or Affiliate to purchase, all (but not less than all)
of the shares of Stock proposed to be transferred to a ROFR Transferee,
pursuant to Section 4(b).

 

 

6

 

(b)           The
Company shall have the right and option to purchase, or to arrange for a subsidiary,
third party or Affiliate to purchase, all of the shares of Stock proposed to be
transferred to any ROFR Transferee at a purchase price equal to the minimum
price at which the Management Stockholder proposes to transfer such Stock to
any ROFR Transferee and otherwise on substantially the same terms and
conditions as the proposed transfer (or, if the proposed transfer to any ROFR
Transferee includes any consideration other than cash, then at the sole option
of the Company, at the equivalent all cash price, determined in good faith by
the Board), by delivering (i) a certified bank check or checks in the
appropriate amount (or by wire transfer of immediately available funds, if the
Management Stockholder Entities provide to the Company wire transfer instructions)
and/or (ii) if the proposed transfer to any ROFR Transferee includes any
consideration other than cash, any such non-cash consideration to be paid to
the Management Stockholder at the principal office of the Company against
delivery of certificates or other instruments representing the shares of Stock
so purchased, appropriately endorsed by the Management Stockholder.  If at the end of the 20-day period, the
Company has not tendered (or caused to be tendered) the purchase price for such
shares in the manner set forth above, the Management Stockholder may, during
the succeeding 60-day period, sell not less than all of the shares of Stock
proposed to be transferred to any ROFR Transferee (subject to compliance with
the other terms of this Agreement) on terms no less favorable to the Management
Stockholder than those contained in the ROFR Notice.  Promptly after such sale, the Management
Stockholder shall notify the Company of the consummation thereof and shall
furnish such evidence of the completion and time of completion of such sale and
of the terms thereof as may reasonably be requested by the Company.  If, at the end of sixty (60) days
following the expiration of the 20-day period during which the Company is
entitled hereunder to purchase the Stock, the Management Stockholder has not
completed the sale of such shares of the Stock as aforesaid, all of the
restrictions on sale, transfer or assignment contained in this Agreement shall
again be in effect with respect to such shares of the Stock.

 

(c)           Notwithstanding
anything in this Agreement to the contrary, this Section 4 shall terminate
and be of no further force or effect upon the earlier of occurrence of a Change
in Control or a Qualified Public Offering.

 

5.                                       The
Management Stockholder’s Right to Resell Stock and Options to the Company.

 

(a)           Except
as otherwise provided herein, and subject to Section 6(h), if, prior to
the fifth anniversary of the Closing Date, the Management Stockholder’s
employment with the Company (or, if applicable, any of its subsidiaries or
affiliates) terminates as a result of the death or Disability of the Management
Stockholder, then the applicable Management Stockholder Entity, shall, for 365
days (the “Put Period”) following the date of such termination for death
or Disability, have the right to:

 

(i)              With respect to Stock, sell to the
Company, and the Company shall be required to purchase, on one occasion, all of
the shares of Stock then held by the applicable Management Stockholder Entities
at a per share price equal to Fair Market Value on the Repurchase Calculation
Date (the “Section 5 Repurchase Price”); and

 

(ii)             With respect to any outstanding
Rollover Options and vested New Options, sell to the Company, and the Company
shall be required to purchase, on one occasion, all of the Rollover Options and
vested New Options then held by the applicable Management Stockholder Entities
for an amount equal to the product of 

 

 

7

 

 

(x) the
excess, if any, of the Section 5 Repurchase Price over the Option Exercise
Price and (y) the number of Exercisable Option Shares, which Options shall
be terminated in exchange for such payment. 
In the event the Management Stockholder Entity elects to sell under this
Section 5(a)(ii) and the foregoing Option Excess Price is zero or a
negative number, all outstanding exercisable Options granted to the Management
Stockholder shall be automatically terminated without any payment in respect
thereof. In addition, and for the avoidance of doubt, all unvested New Options
shall be terminated and cancelled without any payment therefor.

 

(b)           In
the event the applicable Management Stockholder Entities intend to exercise
their rights pursuant to Section 5(a) or 5(e), such Management
Stockholder Entities shall send written notice to the Company, at any time
during the Put Period, of their intention to sell shares of Stock in exchange
for the payment referred to in Section 5(a)(i) or 5(e)(i) (as
the case may be) and/or to sell such Options in exchange for the payment
referred to in Section 5(a)(ii) or 5(e)(ii) (as the case may be)
and shall indicate the number of shares of Stock to be sold and the number of
Options (based on the number of Exercisable Option Shares) to be sold with
payment in respect thereof (the “Redemption Notice”).   The completion of the purchases shall take
place at the principal office of the Company on no later than the twentieth
business day (such date to be determined by the Company) after the giving of
the Redemption Notice.  The applicable
Repurchase Price (including any payment with respect to the Options as
described above) shall be paid by delivery to the applicable Management
Stockholder Entities, at the option of the Company, of a certified bank check
or checks in the appropriate amount payable to the order of each of the
applicable Management Stockholder Entities (or by wire transfer of immediately
available funds, if the Management Stockholder Entities provide to the Company
wire transfer instructions) against delivery of certificates or other
instruments representing the Stock so purchased and appropriate documents
cancelling the Options so terminated appropriately endorsed or executed by the
applicable Management Stockholder Entities or any duly authorized
representative.

 

(c)           Notwithstanding
anything in this Section 5 to the contrary, if there exists and is
continuing a default or an event of default on the part of the Company or any
subsidiary of the Company under any loan, guarantee or other agreement under
which the Company or any subsidiary of the Company has borrowed money or if the
repurchase referred to in Section 5(a) or 5(e) (or Section 6
below, as the case may be) would result in a default or an event of default on
the part of the Company or any affiliate of the Company under any such
agreement or if a repurchase would reasonably be expected to be prohibited by
the Tennessee Business Corporation Act (“TBCA”) or any federal or state
securities laws or regulations (or if the Company reincorporates in another
state, the business corporation law of such state) (each such occurrence being
an “Event”), the Company shall not be obligated to repurchase any of the
Stock or the Options from the applicable Management Stockholder Entities to the
extent it would cause any such default or would be so prohibited by the Event
for cash but instead, with respect to such portion with respect to which cash
settlement is prohibited, may satisfy its obligations with respect to the
Management Stockholder Entities’ exercise of their rights under Section 5(a) or
5(e) by delivering to the applicable Management Stockholder Entity a note
with a principal amount equal to the amount payable under this Section 5
that was not paid in cash, having terms acceptable to the Company’s (and its
affiliate’s, as applicable) lenders and permitted under the Company’s (and its
affiliate’s, as applicable) debt instruments but which in any event (i) shall
be mandatorily repayable promptly and to the extent that an Event no longer
prohibits the payment of cash to the applicable Management Stockholder Entity
pursuant to this 

 

 

8

 

Agreement; and (ii) shall bear interest at a rate equal to the
effective rate of interest in respect of the Company’s U.S. dollar-denominated
subordinated public debt securities (including any original issue
discount).  Notwithstanding the foregoing
and subject to Section 5(d), if an Event exists and is continuing for
ninety (90) days after the date of the Redemption Notice, the Management
Stockholder Entities shall be permitted by written notice to rescind any
Redemption Notice with respect to that portion of the Stock and Options
repurchased by the Company from the Management Stockholder Entities pursuant to
this Section 5 with the note described in the foregoing sentence, and such
repurchase shall be rescinded; provided that, upon such rescission, such
note shall be immediately canceled without any action on the part of the
Company or the Management Stockholder Entities, and notwithstanding anything
herein or in such note to the contrary, the Company shall have no obligation to
pay any amounts of principal or interest thereunder.

 

(d)           Notwithstanding
anything in this Agreement to the contrary, except for any payment obligation
of the Company which has arisen prior to the occurrence of a Change in Control,
Section 5 shall terminate and be of no further force or effect upon the
occurrence of such Change in Control.

 

(e)           If
prior to the later of (i) the first anniversary of the Closing Date and (ii) the
last day of the six-month period a new chief executive officer of the Company
commences employment, an Executive Management Stockholder terminates his or her
employment with the Company (for any reason), then the applicable Executive
Management Stockholder will, for the Put Period following the date of such
termination, have the right to:

 

(i)            With respect to Stock, sell to the
Company, and the Company shall be required to purchase, on one occasion, all of
the shares of Stock then held by the applicable Management Stockholder Entities
at a per share price equal to the Base Price; and

 

(ii)           With respect to any outstanding
Rollover Options, sell to the Company, and the Company shall be required to
purchase, on one occasion, all of the Rollover Options then held by the
applicable Management Stockholder Entities for an amount equal to the product
of (x) the excess, if any, of the Base Price over the Option Exercise
Price and (y) the number of Exercisable Option Shares (solely relating to
Rollover Options), which Options shall be terminated in exchange for such
payment.

 

6.                                           The
Company’s Option to Purchase Stock and Options of the Management Stockholder
Upon Certain Terminations of Employment.

 

(a)           Termination for Cause by the Company and other Call Events.  If, (i) prior to the fifth anniversary
of the Closing Date, the Management Stockholder’s active employment with the
Company (or, if applicable, its subsidiaries or affiliates) is terminated by
the Company (or, if applicable, its subsidiaries or affiliates) for Cause, or (ii) the
Management Stockholder Entities effect a transfer of Stock (or Options) that is
prohibited under this Agreement (or the Stock Option Agreements, as
applicable), after notice from the Company of such impermissible transfer and a
reasonable opportunity to cure such transfer which is not so cured (each event
described above, a “Section 6(a) Call Event”), then:

 

 

9

 

(i)            With respect to Stock, the Company
may purchase, on one occasion, all or any portion of the shares of Stock then
held by the applicable Management Stockholder Entities at a per share purchase
price equal to the lesser of (x) Base Price (or other applicable price
paid by such Management Stockholder Entities for such Stock) and (y) the Fair
Market Value on the Repurchase Calculation Date;

 

(ii)           With respect to any outstanding
Rollover Options, the Company may purchase, on one occasion, all or any portion
of the Rollover Options then held by the applicable Management Stockholder
Entities for an amount equal to the product of (x) the lesser of (I) Base
Price over the Option Exercise Price and (II) Fair Market Value on the
Repurchase Calculation Date over the Option Exercise Price and (y) the
number of Exercisable Option Shares (solely relating to Rollover Options),
which Options shall be terminated in exchange for such payment; and

 

(iii)          With respect to all New Options, all
outstanding New Options shall be automatically terminated without any payment
in respect thereof upon the occurrence of the Section 6(a) Call
Event.

 

(b)           Termination without Cause by the Company (other than due to his death
or Disability), and Termination by the Management Stockholder with Good Reason.  If, prior to the fifth anniversary of the
Closing Date, the Management Stockholder’s active employment with the Company
(or, if applicable, its subsidiaries or affiliates) is terminated (i) by
the Company (or, if applicable, its subsidiaries or affiliates) without Cause
(which shall constitute any termination without Cause under any applicable
employment agreement) (other than due to his death or Disability), or (ii) by
the Management Stockholder with Good Reason (each, a “Section 6(b) Call
Event”) then:

 

(i)            With respect to Stock, the Company
may purchase all or any portion of the shares of such Stock then held by the
applicable Management Stockholder Entities at a per share purchase price equal
to Fair Market Value on the Repurchase Calculation Date;

 

(ii)           With respect to any outstanding
Rollover Options and vested New Options, the Company may purchase, on one
occasion, all or any portion of the Rollover Options and the exercisable vested
New Options held by the applicable Management Stockholder Entities for an
amount equal to the product of (x) the excess, if any, of the Fair Market
Value on the Repurchase Calculation Date over the Option Exercise Price and (y) the
number of Exercisable Option Shares (solely relating to Rollover Options and
the vested New Options), which Rollover Options and vested New Options shall be
terminated in exchange for such payment. 
In the event the Company elects to repurchase under this Section 6(b)(ii) and
the foregoing Option Excess Price is zero or a negative number, all outstanding
Rollover Options and exercisable vested New Options shall be automatically
terminated without any payment in respect thereof; and

 

(iii)          With respect to unvested New Options,
all outstanding unvested New 

 

 

10

 

Options shall
automatically be terminated without any payment in respect thereof.

 

(c)           Termination for Death or Disability.  If, prior to the fifth anniversary of the
Closing Date, the Management Stockholder’s employment with the Company (or, if
applicable, its subsidiaries or affiliates) is terminated as a result of the
death or Disability of the Management Stockholder (each a “Section 6(c) Call
Event”), then:

 

(i)            With respect to Stock, the Company
may purchase, on one occasion, all or any portion of the shares of such Stock
then held by the applicable Management Stockholder Entities at a per share
purchase price equal to Fair Market Value on the Repurchase Calculation Date;

 

(ii)           With respect to any outstanding
Rollover Options and vested New Options, the Company may purchase, on one
occasion, all or any portion of the Rollover Options and the exercisable vested
New Options for an amount equal to the product of (x) the excess, if any,
of Fair Market Value on the Repurchase Calculation Date over the Option
Exercise Price and (y) the number of Exercisable Option Shares (solely
relating to Rollover Options and vested New Options), which Rollover Options
and vested New Options shall be terminated in exchange for such payment.  In the event the Company elects to repurchase
under this Section 6(c)(ii) and the foregoing Option Excess Price is
zero or a negative number, all outstanding exercisable stock options granted to
the Management Stockholder under the Option Plan shall be automatically
terminated without any payment in respect thereof; and

 

(iii)          With respect to unvested New Options,
all outstanding unvested New Options shall automatically be terminated without
any payment in respect thereof.

 

(d)           Termination by the Management Stockholder without Good Reason. If,
prior to the fifth anniversary of the Closing Date, the Management Stockholder’s
active employment with the Company (and/or, if applicable, it subsidiaries or
affiliates) is terminated by the Management Stockholder without Good Reason (a “Section 6(d) Call
Event”), then:

 

(i)            With respect to any Purchased Stock,
Rollover Stock or Stock acquired pursuant to the exercise of Rollover Options,
the Company may purchase, on one occasion, all or any portion of the shares of
such Stock then held by the applicable Management Stockholder Entities at a per
share purchase price equal to the lesser of (x) the Fair Market Value and (y) the
sum of (A) the Base Price (or other applicable price paid by such
Management Stockholder Entities for such Stock), plus (B) the
Applicable Percentage of the excess of the Fair Market Value over the Base
Price (or other applicable price paid by such management Stockholder Entities
for such Stock), as of the Repurchase Calculation Date; and

 

(ii)           With respect to the Options, the
Company may purchase, on one occasion, all or any portion of the Rollover
Options for an amount equal to the lesser of (x) the excess, if any, of
Fair Market Value on the Repurchase Calculation Date

 

 

11

 

over the Option Exercise
Price and (y) the sum of (A) the Base Price plus (B) the Applicable
Percentage of the excess of the Fair Market Value over the Base Price, less
(C) the Option Exercise Price, in each of case (x) and (y),
multiplied by the number of Exercisable Option Shares (solely relating to
Rollover Options), which Rollover Options shall be terminated in exchange for
such payment.  All new Options (whether
or not then exercisable) held by the applicable Management Stockholder Entities
will terminate immediately without payment in respect thereof; and

 

(iii)          With respect to any Stock acquired
pursuant to the exercise of New Options, the Company may purchase, on one
occasion, all or any portion of the shares of such Stock then held by the
applicable Management Stockholder Entities at a per share purchase price equal
to the lesser of (x) the Fair Market Value as of the Repurchase
Calculation Date and (y) the applicable per share purchase price paid by
the applicable Management Stockholder Entities for such Stock (which equals the
Base Price for any New Options granted on the Closing Date).

 

(e)           Call Notice.  The
Company shall have a period (the “Call Period”) of one hundred eighty
(180) days from the date of any Call Event (or, if later, with respect to a Section 6(a) Call
Event, the date after discovery of, and the applicable cure period for, an
impermissible transfer constituting a Section 6(a) Call Event) in
which to give notice in writing to the Management Stockholder of its election
to exercise its rights and obligations pursuant to this Section 6 (“Repurchase
Notice”).  The completion of the
purchases pursuant to the foregoing shall take place at the principal office of
the Company no later than the fifteenth business day after the giving of the
Repurchase Notice.  The applicable
Repurchase Price (including any payment with respect to the Options as
described in this Section 6) shall be paid by delivery to the applicable
Management Stockholder Entities of a certified bank check or checks in the
appropriate amount payable to the order of each of the applicable Management
Stockholder Entities (or by wire transfer of immediately available funds, if
the Management Stockholder Entities provide to the Company wire transfer
instructions) against delivery of certificates or other instruments
representing the Stock so purchased and appropriate documents canceling the
Options so terminated, appropriately endorsed or executed by the applicable
Management Stockholder Entities or any duly authorized representative.

 

(f)            Use of Note to Satisfy Call Payment.  Notwithstanding any other provision of this Section 6
to the contrary, if there exists and is continuing any Event, the Company will,
to the extent it has exercised its rights to purchase Stock or Options pursuant
to this Section 6, in order to complete the purchase of any Stock or
Options pursuant to this Section 6, deliver to the applicable Management
Stockholder Entities (i) a cash payment for any amounts payable pursuant
to this Section 6 that would not cause an Event and (ii) a note
having the same terms as that provided in Section 5(c) above with a
principal amount equal to the amount payable but not paid in cash pursuant to
this Section 6 due to the Event. 
Notwithstanding the foregoing, if an Event exists and is continuing for
ninety (90) days from the date of the Call Event, the Management Stockholder
Entities shall be permitted by written notice to cause the Company to rescind
any Repurchase Notice with respect to that portion of the Stock and Options
repurchased by the Company from the Management Stockholder Entities pursuant to
this Section 6 with the note described in the foregoing sentence; provided
that, upon such rescission, such repurchase shall be immediately rescinded and
such note shall be immediately canceled without any action on the part of the
Company or the

 

 

12

 

Management Stockholder Entities and, notwithstanding anything herein or
in such note to the contrary, the Company shall have no obligation to pay any
amounts of principal or interest thereunder.

 

(g)           Effect of Change in Control. 
Notwithstanding anything in this Agreement to the contrary, except for
any payment obligation of the Company which has arisen prior to the occurrence
of a Change in Control, this Section 6 shall terminate and be of no
further force or effect upon the occurrence of such Change in Control.

 

7.             Adjustment of Repurchase Price; Definitions.

 

(a)           Adjustment of Repurchase Price.  In determining the applicable repurchase
price of the Stock and Options, as provided for in Sections 5 and 6,
above, appropriate adjustments shall be made for any stock dividends, splits,
combinations, recapitalizations or any other adjustment in the number of
outstanding shares of Stock in order to maintain, as nearly as practicable, the
intended operation of the provisions of Sections 5 and 6.

 

(b)           Definitions.  All
capitalized terms used in this Agreement and not defined herein shall have such
meaning as such terms are defined in the Option Plan.  Terms used herein and as listed below shall
be defined as follows:

 

“Act”
shall have the meaning set forth in Section 2(a)(i) hereof.

 

“Affiliate”
means with respect to any Person, any entity directly or indirectly
controlling, controlled by or under common control with such Person; provided,
however, for purposes of this Agreement, Buck Holdings Co-Invest, LP shall not
be deemed to be an Affiliate of the Sponsor.

 

“Agreement”
shall have the meaning set forth in the introductory paragraph.

 

“Applicable
Percentage” shall mean: (i) 20% on or after the first
anniversary of the Closing Date, (ii) 40% on and after the second
anniversary of the Closing Date, (iii) 60% on and after the third
anniversary of the Closing Date, (iv) 80% on and after the fourth
anniversary of the Closing Date, and (v) 100% on and after the fifth anniversary
of the Closing Date.

 

“Base Price” shall
have the meaning set forth in Section 1(a) hereof.

 

“Board” shall mean the board of directors of
the Company.

 

“Call Events” shall mean, collectively, Section 6(a) Call
Events, Section 6(b) Call Events, Section 6(c) Call Events
and Section 6(d) Call Events.

 

“Call Notice” shall have the meaning set
forth in Section 6(e) hereof.

 

“Call Period” shall have the meaning set
forth in Section 6(e) hereof.

 

                “Cause” shall mean “Cause”
as such term may be defined in any employment agreement or change in control
agreement in effect at the time of termination of employment between the
Management Stockholder and the Company or any of its subsidiaries or
Affiliates; or, if there is no such employment or change in control agreement, “Cause”
shall

 

 

13

 

mean,
with respect to a Management Stockholder: (i) any act involving fraud or
dishonesty; (ii) any material breach of any securities or other law or
regulation or any Company policy governing trading or dealing with stock,
securities, investments or the like or with inappropriate disclosure or “tipping”
relating to any stock, securities or investments or the like; (iii) other
than as required by law, the carrying out of any activity or making any public
statement which prejudices or ridicules the good name and standing of the
Company or its Affiliates (including any limited partner of Parent) or would
bring such persons into public contempt or ridicule; (iv) attendance at
work in a state of intoxication or otherwise being found in possession at the
place of work of any prohibited drug or substance, possession of which would
amount to a criminal offence; (v) any assault or other act of violence; or
(vi) conviction of, or a plea of nolo contendere to, a crime constituting (x) any
felony whatsoever or (y) any misdemeanor that would preclude employment
under the Company’s hiring policy.  A
termination for Cause shall be effective when the Company has given Management
Stockholder written notice of its intention to terminate for Cause, describing
those acts or omissions that are believed to constitute Cause, and has given
Management Stockholder an opportunity to respond.

 

                “Change
in Control” means, in one or a series of related transactions, (i) the
sale of all or substantially all of the assets of Buck Holdings, L.P. or the
Company and its subsidiaries to any person (or group of persons acting in
concert), other than to (x) investment funds affiliated with Kohlberg
Kravis Roberts & Co. L.P. (the “Sponsor”) or its Affiliates or (y) any
employee benefit plan (or trust forming a part thereof) maintained by the
Company, the Sponsor or their respective Affiliates or other person of which a
majority of its voting power or other equity securities is owned, directly or
indirectly, by the Company, the Sponsor or their respective Affiliates; or (ii) a
merger, recapitalization or other sale by the Company, the Sponsor (indirectly)
or any of their respective Affiliates, to a person (or group of persons acting
in concert) of Common Stock or other voting securities of the Company that
results in more than 50% of the Common Stock or other voting securities of the
Company (or any resulting company after a merger) being held, directly or
indirectly,  by a person (or group of
persons acting in concert) that is not Controlled by (x) the Sponsor or
its Affiliates or (y) an employee benefit plan (or trust forming a part
thereof) maintained by the Company, the Sponsor or their respective Affiliates
or other person of which a majority of its voting power or other equity
securities is owned, directly or indirectly, by the Company, the Sponsor or
their respective Affiliates; in any event, which results in the Sponsor and its
Affiliates or such employee benefit plan ceasing to hold the ability to elect
(or cause to be elected) a majority of the members of the Board.

 

“Closing
Date” shall mean the date of closing of the Merger pursuant to the Merger
Agreement.

 

“Common
Stock” shall have the meaning set forth in the third “whereas” paragraph.

 

“Company”
shall have the meaning set forth in the introductory paragraph.

 

“Confidential
Information” shall mean all non-public information concerning trade secret,
know-how, software, developments, inventions, processes, technology, designs,
the financial data, strategic business plans or any proprietary or confidential
information, documents or materials in any form or media, including any of the
foregoing relating to research, operations, finances, current and proposed
products and services, vendors, customers, advertising and marketing, and other
non-public, proprietary, and confidential information of the Restricted Group.

 

 

14

 

“Controlled
by” means with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to direct
or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the ownership, directly or indirectly, of securities having the power to elect
a majority of the board of directors or similar body governing the affairs of
such Person.

 

“Coordination
Committee” shall have the meaning set forth in the Partnership Agreement.

 

“Custody
Agreement and Power of Attorney” shall have the meaning set forth in Section 9(e) hereof.

 

“Disability”
shall mean “Disability” as such term is defined in the then current long-term
disability plan of the Company.

 

“Effective
Time” shall have the meaning set forth in the Merger Agreement.

 

“Event”
shall have the meaning set forth in Section 5(c) hereof.

 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended (or any
successor section thereto).

 

“Executive
Management Stockholders” shall mean any of the Management Stockholders
whose job grade level, as of the date hereof, is 32 or higher and are
designated as such on Schedule I hereto.

 

“Exercisable
Option Shares” shall mean the shares of Common Stock that, at the time that
Redemption Notice or Repurchase Notice is delivered (as applicable), could be
purchased by the Management Stockholder upon exercise of his or her outstanding
and exercisable Options.

 

“Fair
Market Value” shall mean the fair market value of one share of Common Stock
on any given date, as determined reasonably and in good faith by the Board,
determined without regard to any discount for minority interest and transfer
restrictions imposed on the Common Stock of the Management Stockholder
Entities.

 

“Good Reason”
shall mean “Good Reason” as such term may be defined in any employment
agreement or change-in-control agreement in effect at the time of termination
of employment between the Management Stockholder and the Company or any of its
subsidiaries or Affiliates, or, if there is no such employment or
change-in-control agreement, “Good Reason” shall mean, with respect to the
Management Stockholder: (i) a reduction in base salary or target bonus
level; (ii) the Company’s failure to continue in effect any significant
Company-sponsored compensation or benefit plan (without replacing it with a
similar plan or with a compensation equivalent), unless such action is in
connection with a change or termination that affects at least ninety-five
percent (95%) of all executive employees of the Company; (iii) the Company’s
principal executive offices shall be moved to a location outside the middle-
Tennessee area, or the Management Stockholder is required to be based anywhere
other than the Company’s principal executive offices; (iv) without the
Management Stockholder’s prior written consent, the assignment by the Company
of duties inconsistent with, or the significant reduction of the title, powers
and functions associated 

 

 

15

 

with, the
Management Stockholder’s position, titles or offices, unless such action is the
result of a restructuring or realignment of duties and responsibilities by the
Company, for business reasons that leaves the Management Stockholder at the
same compensation and officer level (i.e., Vice President, Senior Vice
President, Executive Vice President, etc.) and with a similar level of
responsibility, or unless such action is a result of the Management Stockholder’s
failure to meet pre-established and objective performance criteria; (v) any
material breach by the Company of this Agreement; or (vi) the failure of
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform the terms of this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place; provided, however,
that any isolated, insubstantial and inadvertent failure by the Company that is
not in bad faith and is cured within ten (10) business days after the
Management Stockholder gives the Company written notice of any such event set
forth above, shall not constitute Good Reason.

 

“Group”
shall mean “group,” as such term is used for purposes of Section 13(d) or
14(d) of the Exchange Act.

 

“Investors”
shall have the meaning set forth in the second “whereas” paragraph.

 

 “Management Stockholder” shall have the
meaning set forth in the introductory paragraph.

 

“Management
Stockholder Entities” shall mean the Management Stockholder’s Trust, the
Management Stockholder and the Management Stockholder’s Estate, collectively.

 

“Management
Stockholder’s Estate” shall mean the conservators, guardians, executors,
administrators, testamentary trustees, legatees or beneficiaries of the
Management Stockholder.

 

 “Management Stockholder’s Trust” shall
mean a partnership, limited liability company, corporation, trust, private
foundation or custodianship, the beneficiaries of which may include only the
Management Stockholder, his or her spouse (or ex-spouse) or his or her lineal
descendants (including adopted) or, if at any time after any such transfer
there shall be no then living spouse or lineal descendants, then to the
ultimate beneficiaries of any such trust or to the estate of a deceased
beneficiary.

 

“Merger”
shall have the meaning set forth in the first “whereas” paragraph.

 

“Merger
Agreement” shall have the meaning set forth in the first “whereas” paragraph.

 

“Merger Sub”
shall have the meaning set forth in the first “whereas” paragraph.

 

“New
Options” shall have the meaning set forth in the fourth “whereas”
paragraph.

 

“New Option
Agreement” shall have the meaning set forth in the fourth “whereas” paragraph.

 

“Options”
shall have the meaning set forth in the fourth “whereas” paragraph.

 

 

16

 

“Option
Excess Price” shall mean the aggregate amount paid or payable by the
Company in respect of Exercisable Option Shares, as determined pursuant to Section 5
or 6 hereof, as applicable.

 

“Option
Exercise Price” shall mean the then-current exercise price of the shares of
Common Stock covered by the applicable Option.

 

“Option
Plan” shall have the meaning set forth in the fourth “whereas” paragraph.

 

“Option
Rollover Agreement” shall have the meaning set forth in the fourth “whereas”
paragraph.

 

“Option
Stock” shall have the meaning set forth in Section 2(a) hereof.

 

“Other
Management Stockholders” shall have the meaning set forth in the fifth “whereas”
paragraph.

 

“Other
Management Stockholders Agreements” shall have the meaning set forth in the
fifth “whereas” paragraph.

 

“Parent”
shall have the meaning set forth in the introductory paragraph.

 

“Parties”
shall have the meaning set forth in the introductory paragraph.

 

“Partnership
Agreement” means the Amended and restated Limited Partnership Agreement of
Buck holdings, L.P., as it may be amended, modified, restated or supplemented
from time to time.

 

“Permitted
Transfer” shall have the meaning set forth in Section 3(a).

 

“Person”
shall mean “person,” as such term is used for purposes of Section 13(d) or
14(d) of the Exchange Act.

 

“Piggyback
Notice” shall have the meaning set forth in Section 9(b) hereof.

 

“Piggyback
Registration Rights” shall have the meaning set forth in Section 9(a) hereof.

 

“Proposed
Registration” shall have the meaning set forth in Section 9(b) hereof.

 

“Public
Offering” shall mean the sale of shares of Common Stock to the public
subsequent to the date hereof pursuant to a registration statement under the
Act which has been declared effective by the SEC (other than a registration
statement on Form S-4, S-8 or any other similar form).

 

“Purchased
Stock” shall have the meaning set forth in the fourth “whereas” paragraph.

 

“Put Period”
shall have the meaning set forth in Section 5(a) hereof.

 

“Qualified
Public Offering” means the initial Public Offering (i) for which cash
proceeds to be received by the Company (or any successor thereto) from such
offering (or 

 

 

17

 

series of
related offerings) (without deducting underwriter discounts, expenses and
commissions) are at least $400,000,000, or (ii) pursuant to which at least
35% of the outstanding shares of Common Stock are sold by the Company (or any
successor thereto).

 

“Redemption
Notice” shall have the meaning set forth in Section 5(b) hereof.

 

“Registration
Rights Agreement” shall have the meaning set forth in Section 9(a) hereof.

 

“Repurchase
Calculation Date” shall mean (i) prior to the occurrence of a Public
Offering, the last day of the month preceding the month in which date of
repurchase occurs, and (ii) on and after the occurrence of a Public
Offering, the closing trading price on the date immediately preceding the date
of repurchase.

 

“Repurchase
Notice” shall have the meaning set forth in Section 6(e) hereof.

 

“Repurchase
Price” shall mean the amount to be paid in respect of the Stock and Options
to be purchased by the Company pursuant to Section 5 and Section 6,
as applicable.

 

“Request”
shall have the meaning set forth in Section 9(b) hereof.

 

“Restricted
Group” shall mean, collectively, the Company, its subsidiaries, the
Investors and their respective affiliates.

 

“ROFR
Notice” shall have the meaning set forth in Section 4(a) hereof.

 

“ROFR
Transferee” shall have the meaning set forth in Section 4(a) hereof.

 

“Rollover
Options” shall have the meaning set forth in the fourth “whereas”
paragraph.

 

“Rollover
Stock” shall have the meaning set forth in the fourth “whereas” paragraph.

 

“Sale
Participation Agreement” shall mean that certain sale participation
agreement entered into by and between the Management Stockholder and Parent
dated as of the date hereof.

 

“SEC”
shall mean the Securities and Exchange Commission.

 

“Senior
Management Stockholder” shall mean any of the Management Stockholders or
Other Management Stockholders whose job grade level is Vice President or above
and who has been designated as such on Schedule I hereto or the
corresponding schedule of the Other Management Stockholders Agreements, as
applicable.

 

“Stock”
shall have the meaning set forth in Section 2(a) hereof.

 

“Stock
Option Agreements” shall have the meaning set forth in the fourth “whereas”
paragraph.

 

“TBCA”
shall have the meaning set forth in Section 5(c) hereof.

 

“transfer”
shall have the meaning set forth in Section 2(a) hereof.

 

 

18

8.             The Company’s Representations and Warranties and
Covenants.

 

(a)           The
Company represents and warrants to the Management Stockholder that (i) this
Agreement has been duly authorized, executed and delivered by the Company and
is enforceable against the Company in accordance with its terms and (ii) the
Stock, when issued and delivered in accordance with the terms hereof and the
other agreements contemplated hereby, will be duly and validly issued, fully
paid and nonassessable.

 

(b)           If
the Company becomes subject to the reporting requirements of Section 12 of
the Exchange Act, the Company will file the reports required to be filed by it
under the Act and the Exchange Act and the rules and regulations adopted
by the SEC thereunder, to the extent required from time to time to enable the
Management Stockholder to sell shares of Stock, subject to compliance with the
provisions hereof (including requirements of the Coordination Committee of
Parent or the Company) without registration under the Exchange Act within the
limitations of the exemptions provided by (A) Rule 144 under the Act,
as such Rule may be amended from time to time, or (B) any similar rule or
regulation hereafter adopted by the SEC. 
Notwithstanding anything contained in this Section 8(b), the
Company may de-register under Section 12 of the Exchange Act if it is then
permitted to do so pursuant to the Exchange Act and the rules and
regulations thereunder and, in such circumstances, shall not be required hereby
to file any reports which may be necessary in order for Rule 144 or any
similar rule or regulation under the Act to be available.  Nothing in this Section 8(b) shall
be deemed to limit in any manner the restrictions on transfers of Stock
contained in this Agreement.

 

(c)           The
Company will not agree to any amendment of the terms of the credit agreement
entered into on the Closing Date, or to any corresponding provision in any successor
or equivalent debt agreement, that imposes any limits on the Company’s
permission thereunder to repurchase stock, or make payments on any note, in
each case under Section 5(c) or 6(e) of this Agreement, that are materially
more restrictive than such provision under such credit agreement as in effect
on the Closing Date if, at or prior to the time of such agreement, restrictions
corresponding and proportionate thereto have not also been imposed thereunder on
the payment of cash dividends on the Common Stock.

 

9.             “Piggyback”
Registration Rights.  Effective after
the occurrence of an initial Public Offering:

 

(a)           The
Parties agree to be bound, with respect to Senior Management Stockholders or to
any other Management Stockholder who are provided such rights pursuant to this Section 9,
by all of the terms, conditions and obligations of the Registration Rights
Agreement (the “Registration Rights Agreement”) as they relate to the
exercise of piggyback registration rights as provided in Sections 4, 6, 7, 8
and 11 (but not Section 11(l)) of the Registration Rights Agreement
entered into by and among the Company and investors party thereto (the “Piggyback
Registration Rights”), as in effect on the date hereof (subject, with
respect to any such Management Stockholder provided Piggyback Registration
Rights, only to any amendments thereto to which such Management Stockholder has
agreed in writing to be bound), and, if any of the Investors are selling stock,
shall have all of the rights and privileges of the Piggyback Registration
Rights (including, without limitation, the right to participate in the initial
Public Offering and any rights to indemnification and/or contribution from the
Company and/or the Investors), in each case as if the Management Stockholder
were an original party (other than the Company) to the Registration Rights
Agreement, subject to 

 

19

 

 

applicable and customary underwriter restrictions; provided, however,
that at no time shall the Management Stockholder have any rights to request
registration under Section 3 of the Registration Rights Agreement.  All Stock purchased or held by the applicable
Management Stockholder Entities pursuant to this Agreement shall be deemed to
be “Registrable Securities” as defined in the Registration Rights Agreement.

 

(b)           In
the event of a sale of Common Stock by any of the Investors in accordance with
the terms of the Registration Rights Agreement, the Company will promptly
notify each Senior Management Stockholder or other Management Stockholder to
whom the Board, after consultation with the Chief Executive Officer, Chief
Operating Officer and Chief Financial Officer of the Company, has decided to
extend the Piggyback Registration Rights, in writing (a “Piggyback Notice”)
of any proposed registration (a “Proposed Registration”), which
Piggyback Notice shall include: the principal terms and
conditions of the proposed registration, including (A) the number of the
shares of Common Stock to be sold, (B) the fraction expressed as a
percentage, determined by dividing the number of shares of Common Stock to be
sold by the holders of Registrable Securities by the total number of shares
held by the holders of Registrable Securities selling the shares of Common
Stock, (C) the proposed per share purchase price (or an estimate thereof),
and (D) the proposed date of sale.  If within
fifteen (15) days of the receipt by the Management Stockholder or Management
Stockholder, as the case may be, of such Piggyback Notice, the Company receives
from the applicable Management Stockholder Entities of the Senior Management
Stockholder or Management Stockholder, as the case may be, a written request (a
“Request”) to register shares of Stock held by the applicable Management
Stockholder Entities (which Request will be irrevocable unless otherwise
mutually agreed to in writing by the Senior Management Stockholder or Management
Stockholder, if any, and the Company), shares of Stock will be so registered as
provided in this Section 9; provided, however, that for each
such registration statement only one Request, which shall be executed by the
applicable Management Stockholder Entities, may be submitted for all
Registrable Securities held by the applicable Management Stockholder Entities.

 

(c)           The
maximum number of shares of Stock which will be registered pursuant to a
Request will be the lowest of (i) the number of shares of Stock then held
by the Management Stockholder Entities, including all shares of Stock which the
Management Stockholder Entities are then entitled to acquire under an
unexercised Option to the extent then exercisable, multiplied by a fraction,
the numerator of which is the aggregate number of shares of Stock being sold by
holders of Registrable Securities and the denominator of which is the aggregate
number of shares of Stock owned by the holders of Registrable Securities or (ii) the
maximum number of shares of Stock which the Company can register in connection
with such Request in the Proposed Registration without adverse effect on the
offering in the view of the managing underwriters (reduced pro rata as more
fully described in subsection (d) of this Section 9 or (iii) the
maximum number of shares which the Senior Management Stockholder (pro rata
based upon the aggregate number of shares of Stock the Senior Management
Stockholder and all Other Management Stockholders who are Senior Management
Stockholders have requested to be registered) is permitted to register under
the Piggyback Registration Rights.

 

(d)           If
a Proposed Registration involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
shares of Stock requested to be included in the Proposed Registration exceeds
the number which can be sold in such offering, so as to be likely to have an
adverse effect on the price, 

 

20

 

timing or distribution of the shares of Stock offered in such Public
Offering as contemplated by the Company, then, unless the managing underwriter
advises that marketing factors require a different allocation, the Company will
include in the Proposed Registration (i) first, 100% of the shares of
Stock the Company proposes to sell and (ii) second, to the extent of the
number of shares of Stock requested to be included in such registration which,
in the opinion of such managing underwriter, can be sold without having the
adverse effect referred to above, the number of shares of Stock which the
selling holders of Registrable Securities, the Senior Management Stockholder
and all Other Management Stockholders who are Senior Management Stockholders
and any other Persons who are entitled to piggyback or incidental registration
rights in respect of Stock (together, the “Holders”) have requested to
be included in the Proposed Registration, such amount to be allocated pro rata
among all requesting Holders on the basis of the relative number of shares of
Stock then held by each such Holder (including upon exercise of all exercisable
Options) (provided that any shares thereby allocated to any such Holder
that exceed such Holder’s request will be reallocated among the remaining requesting
Holders in like manner).

 

(e)           Upon
delivering a Request a Senior Management Stockholder or other Management
Stockholder having Piggyback Registration Rights pursuant to clause (b) of
this Section 9 will, if requested by the Company, execute and deliver a
custody agreement and power of attorney having customary terms and in form and
substance reasonably satisfactory to the Company with respect to the shares of
Stock to be registered pursuant to this Section 9 (a “Custody Agreement
and Power of Attorney”).  The Custody
Agreement and Power of Attorney will provide, among other things, that the
Senior Management Stockholder or Management Stockholder, as the case may be,
will deliver to and deposit in custody with the custodian and attorney-in-fact
named therein a certificate or certificates (to the extent applicable)
representing such shares of Stock (duly endorsed in blank by the registered
owner or owners thereof or accompanied by duly executed stock powers in blank)
and irrevocably appoint said custodian and attorney-in-fact as the Senior
Management Stockholder’s or Management Stockholder’s agent and attorney-in-fact
with full power and authority to act under the Custody Agreement and Power of
Attorney on the Senior Management Stockholder’s or Management Stockholder’s
behalf with respect to the matters specified therein.

 

(f)            The
Management Stockholder agrees that he will execute such other agreements as the
Company may reasonably request to further evidence the provisions of this Section 9,
including reasonable and customary lock-up agreements; provided that Parent and
its Affiliates enter into a similar agreement if requested by the managing
underwriter.

 

(g)           Notwithstanding
Section 11(l) of the Registration Rights Agreement, this Section 9
will terminate on the earlier of (i) the occurrence of a Change in Control
and (ii) with respect to each Management Stockholder, on the date on which
such Management Stockholder ceases to own any Registrable Securities.

 

10.           Additional Rights of Management
Stockholders.  Notwithstanding
anything herein to the contrary, in the event that the Company receives notice
of any event giving rise to any of the tag-along or piggyback registration
rights of Senior Management Stockholders in Section 9 hereof or in the
Sale Participation Agreement, the Board shall promptly (and in event within
such period of time to allow the Management Stockholder to exercise such right,
if applicable) after being informed of such notice consult with the Chief
Executive Officer, Chief Operating Officer and Chief Financial Officer of the
Company to 

 

21

 

 

determine whether and to what extent any such rights shall be granted
to the Management Stockholder and the Other Management Stockholders who are not
Senior Management Stockholders.  Any such
grant shall be effective upon, and to the extent set forth in, any applicable
resolution passed by the Board, and the Company shall give prompt notice to the
Management Stockholder and the Other Management Stockholders of the adoption
thereof.

 

11.           Rights
to Negotiate Repurchase Price. 
Nothing in this Agreement shall be deemed to restrict or prohibit the
Company from purchasing, redeeming or otherwise acquiring for value shares of
Stock or Options from the Management Stockholder, at any time, upon such terms
and conditions, and for such price, as may be mutually agreed upon in writing
between the Parties, whether or not at the time of such purchase, redemption or
acquisition circumstances exist which specifically grant the Company the right
to purchase, or the Management Stockholder the right to sell, shares of Stock
or any Options under the terms of this Agreement; provided that no such
purchase, redemption or acquisition shall be consummated, and no agreement with
respect to any such purchase, redemption or acquisition shall be entered into,
without the prior approval of the Board.

 

12.           Notice
of Change of Beneficiary. 
Immediately prior to any transfer of Stock to a Management Stockholder’s
Trust, the Management Stockholder shall provide the Company with a copy of the
instruments creating the Management Stockholder’s Trust and with the identity
of the beneficiaries of the Management Stockholder’s Trust.  The Management Stockholder shall notify the
Company as soon as practicable prior to any change in the identity of any
beneficiary of the Management Stockholder’s Trust.

 

13.           Recapitalizations,
etc.  The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Stock or the Options, to any and all shares of capital stock of the Company or
any capital stock, partnership units or any other security evidencing ownership
interests in any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for, or substitution of the Stock or the Options by reason of any
stock dividend, split, reverse split, combination, recapitalization,
liquidation, reclassification, merger, consolidation or otherwise.

 

14.           Management
Stockholder’s Employment by the Company. 
Nothing contained in this Agreement (a) obligates the Company or
any subsidiary of the Company to employ the Management Stockholder in any
capacity whatsoever or (b) prohibits or restricts the Company (or any such
subsidiary) from terminating the employment of the Management Stockholder at
any time or for any reason whatsoever, with or without Cause, and the
Management Stockholder hereby acknowledges and agrees that neither the Company
nor any other person has made any representations or promises whatsoever to the
Management Stockholder concerning the Management Stockholder’s employment or
continued employment by the Company or any subsidiary of the Company.

 

15.           Binding
Effect.  The provisions of this Agreement
shall be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.  In the case of a transferee permitted under Section 2(a) or
Section 3(a) (other than clauses (iii) or (iv) thereof)
hereof, such transferee shall be deemed the Management Stockholder hereunder; provided,
however, that no transferee (including without limitation, transferees
referred to in Section 2(a) or Section 3(a) hereof) shall
derive any rights under this Agreement unless and until such transferee has
delivered to the Company a valid undertaking and becomes bound by the terms of
this 

 

22

 

Agreement.  No provision of this
Agreement is intended to or shall confer upon any Person other than the Parties
any rights or remedies hereunder or with respect hereto.

 

16.           Amendment.  This Agreement may be amended by the Company
at any time upon notice to the Management Stockholder thereof; provided
that any amendment (i) that materially disadvantages the Management
Stockholder shall not be effective unless and until the Management Stockholder
has consented thereto in writing and (ii) that disadvantages a class of
stockholders in more than a de minimis way but less than a material way shall
require the consent of a majority of the equity interests held by such affected
class of stockholders.

 

17.           Closing.  Except as otherwise provided herein, the
closing of each purchase and sale of shares of Stock pursuant to this Agreement
shall take place at the principal office of the Company on the tenth business
day following delivery of the notice by either Party to the other of its
exercise of the right to purchase or sell such Stock hereunder.

 

18.           Applicable Law; Jurisdiction; Arbitration;
Legal Fees.

 

(a)           The
laws of the State of Tennessee applicable to contracts executed and to be
performed entirely in such state shall govern the interpretation, validity and
performance of the terms of this Agreement.

 

(b)           In
the event of any controversy among the parties hereto arising out of, or
relating to, this Agreement which cannot be settled amicably by the parties,
such controversy shall be finally, exclusively and conclusively settled by
mandatory arbitration conducted expeditiously in accordance with the American
Arbitration Association rules by a single independent arbitrator.  Such arbitration process shall take place in
Nashville, TN.  The decision of the
arbitrator shall be final and binding upon all parties hereto and shall be
rendered pursuant to a written decision, which contains a detailed recital of
the arbitrator’s reasoning.  Judgment
upon the award rendered may be entered in any court having jurisdiction
thereof.

 

(c)           Notwithstanding
the foregoing, the Management Stockholder acknowledges and agrees that the
Company, its subsidiaries, the Investors and any of their respective affiliates
shall be entitled to injunctive or other relief in order to enforce the
covenant not to compete, covenant not to solicit and/or confidentiality covenants
as set forth in Section 23(a) of this Agreement.

 

(d)           In
the event of any arbitration or other disputes with regard to this Agreement or
any other document or agreement referred to herein, each Party shall pay its
own legal fees and expenses, unless otherwise determined by the arbitrator.

 

19.           Assignability
of Certain Rights by the Company. 
The Company shall have the right to assign any or all of its rights or
obligations) to purchase shares of Stock pursuant to Sections 4, 5 and 6
hereof; provided, however, that no such assignment shall relieve
the Company from its obligations thereunder.

 

 

23

 

20.           Miscellaneous.

 

(a)           In
this Agreement all references to “dollars” or “$” are to United States dollars and
the masculine pronoun shall include the feminine and neuter, and the singular
the plural, where the context so indicates.

 

(b)           If
any provision of this Agreement shall be declared illegal, void or
unenforceable by any court of competent jurisdiction, the other provisions
shall not be affected, but shall remain in full force and effect.

 

21.           Withholding.  The Company or its subsidiaries shall have
the right to deduct from any cash payment made under this Agreement to the
applicable Management Stockholder Entities any federal, state or local income
or other taxes required by law to be withheld with respect to such payment, if
applicable.

 

22.           Notices.  All notices and other communications provided
for herein shall be in writing.  Any
notice or other communication hereunder shall be deemed duly given (i) upon
electronic confirmation of facsimile, (ii) one business day following the
date sent when sent by overnight delivery and (iii) five (5) business
days following the date mailed when mailed by registered or certified mail
return receipt requested and postage prepaid, in each case as follows:

 

(a)           If to the Company, to it at the
following address:

 

Dollar General Corporation

100 Mission Ridge

Goodlettsville, TN  37202

Attention:  General Counsel

Telecopy:  (615) 855-5180

 

with
copies to:

 

Kohlberg Kravis
Roberts & Co. L.P.

2800 Sand Hill
Road, Suite 200

Menlo Park, CA
94025

Attention:  Michael Calbert

Telecopy:  (650) 233-6553

 

and

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention:  David J. Sorkin, Esq.

                  Marni J. Lerner, Esq.

Telecopy: 
(212) 455-2502

 

(b)           If
to the Management Stockholder, to the Management Stockholder at the address set
forth below under the Management Stockholder’s signature; or at such other
address as either party shall have specified by notice in writing to the other.

 

 

24

 

23.           Confidential
Information; Covenant Not to Compete; Covenant Not to Solicit.

 

(a)           In
consideration of the Company entering into this Agreement with the Management
Stockholder, unless there exists any covenant that pertains to the same subject
matter as set forth in this Section 23 in any employment agreement or
change in control agreement in effect at the time of termination of employment
between the Management Stockholder and the Company or any of its subsidiaries
or Affiliates (the “Existing Restrictive Covenants”),in which case such
covenants shall supersede the covenants contained in this Section 23; then
the Management Stockholder shall be subject to the covenants contained in this Section 23;
provided, however, that the Existing Restrictive Covenants, if they contain the
defined term “Competitive Position”, are hereby amended (and such Management
Stockholder hereby consents to such amendment) to add to the list of entities
deemed to be competitive the following: Costco, BJ’s Wholesale Club, Longs Drug
Stores, Casey’s general Stores Inc., and Pantry Inc.  Subject to the preceding sentence, the
Management Stockholder shall not, directly or indirectly:

 

(i)             at any time during or after the
Management Stockholder’s employment with the Company or its subsidiaries,
disclose any Confidential Information pertaining to the business of the Company
or any of its subsidiaries or the Investors or any of their respective
Affiliates, except when required to perform his or her duties to the Company or
one of its subsidiaries, by law or judicial process;

 

(ii)            at any time during the Management
Stockholder’s employment with the Company or its subsidiaries and for a period
of two  years thereafter, directly or
indirectly, act as a proprietor, investor, director, officer, employee,
substantial stockholder, consultant, or partner in any business that directly or
indirectly competes, at the relevant determination date, with the business of
the Company, any Investor or any of their respective Affiliates in any
geographic area where the Company or its Affiliates manufactures, produces,
sells, leases, rents, licenses or otherwise provides products or services,

 

(iii)           at any time during the Management
Stockholder’s employment with the Company or its subsidiaries and for a period
of two  years thereafter, directly or
indirectly (A) solicit customers or clients of the Company, any of its
subsidiaries, the Investors or any of their respective Affiliates to terminate
their relationship with the Company, any of its subsidiaries, the Investors or
any of their respective Affiliates or otherwise solicit such customers or
clients to compete with any business of the Company, any of its subsidiaries,
the Investors or any of their respective Affiliates or (B) solicit or
offer employment to any person who is, or has been at any time during the
twelve (12) months immediately preceding the termination of the Management
Stockholder’s employment employed by the Company or any of its Affiliates;

 

provided that in each of (ii) and (iii) above,
such restrictions shall not apply with respect to any Investor or any of their
Affiliates that is not engaged in any business that competes, directly or
indirectly, with the Company or any of its subsidiaries.  If the Management 

 

 

25

 

Stockholder is bound by
any other agreement with the Company regarding the use or disclosure of
Confidential Information, the provisions of this Agreement shall be read in
such a way as to further restrict and not to permit any more extensive use or
disclosure of Confidential Information. 
Notwithstanding the foregoing, for the purposes of Section 23(a)(ii),
the Management Stockholder may, directly or indirectly own, solely as an
investment, securities of any Person engaged in the business of the Company or
its affiliates which are publicly traded on a national or regional stock
exchange or quotation system or on the over-the-counter market if the
Management Stockholder (I) is not a controlling person of, or a member of
a group which controls, such person and (II) does not, directly or
indirectly, own 5% or more of any class of securities of such Person.

 

(b)           Notwithstanding
clause (a) above, if at any time a court holds that the restrictions
stated in such clause (a) are unreasonable or otherwise unenforceable
under circumstances then existing, the parties hereto agree that the maximum
period, scope or geographic area determined to be reasonable under such
circumstances by such court will be substituted for the stated period, scope or
area.  Because the Management Stockholder’s
services are unique and because the Management Stockholder has had access to
Confidential Information, the parties hereto agree that money damages will be
an inadequate remedy for any breach of this Agreement.  In the event of a breach or threatened breach
of this Agreement, the Company or its successors or assigns may, in addition to
other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce, or prevent any violations of, the provisions hereof (without
the posting of a bond or other security).

 

(c)           In
the event that the Management Stockholder breaches any of the provisions of Section 23(a),
in addition to all other remedies that may be available to the Company, the
Management Stockholder shall be required to pay to the Company any amounts actually
paid to him or her by the Company in respect of any repurchase by the Company
of any Options or Stock held by such Management Stockholder; provided
that with respect to Option Stock, the Management Stockholder shall be required
to pay to the Company only such amounts, if any, that the Management
Stockholder received in excess of the exercise price paid by the Management
Stockholder in acquiring such Option Stock, on a net after-tax basis.

 

24.           Irrevocable
Proxy.  In accordance with Tenn. Code
Ann. § 48-17-203, each Management Stockholder hereby irrevocably appoints Buck
Holdings, L.P. and any authorized representatives and designees thereof as its lawful proxy and attorney-in-fact to exercise
with full power in such Management Stockholder’s name and on its behalf such
Management Stockholder’s right to vote all of the shares of outstanding Common Stock owned by the Management
Stockholder at any regular or special meeting of the stockholders of the
Company for the express purpose of electing any one or more members to
the Board.  Buck Holdings, L.P. and any
authorized representatives and designees thereof shall vote under this proxy on
behalf of each such Management Stockholder in the same manner as Buck Holdings,
L.P. votes any outstanding shares of Common
Stock owned by it at any such
regular or special meeting of the stockholders of the Company for the
express purpose of electing any one or more members to the Board.   This
proxy is irrevocable and is coupled with an interest and shall not be
terminable as long as this Agreement remains effective among the parties
hereto, their successors, transferees and assigns and, if such Management Stockholder is a natural person, shall not
terminate on the disability or 

 

 

26

 

incompetence of such Management
Stockholder.  The Company is hereby requested and
directed to honor this proxy upon its presentation by Buck Holdings, L.P. and
any authorized representatives and designees thereof, without any duty of
investigation whatsoever on the part of the Company. Each such Management
Stockholder agrees that the Company, and the Company’s secretary shall not be
liable to such Management Stockholder for so honoring this proxy.

 

25.           Effectiveness.  Except for Sections 1, 2(a), 2(f), 2(g), 3,
14, 15, 16, 18, 20 and 22 and this Section 25, which shall become
effective as of the execution and delivery of this Agreement by the Parties,
this Agreement shall become effective upon the Effective Time and prior thereto
shall be of no force or effect.  If the
Merger Agreement shall be terminated in accordance with its terms prior to the
Effective Time, this Agreement shall automatically terminate and be of no force
or effect.

 

[Signatures on next page.]

 

 

27

 

IN WITNESS WHEREOF, the Parties have executed this
Agreement as of the date first above written.

 

 

	
   

  	
   

  	
  DOLLAR GENERAL CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUCK HOLDINGS, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Buck Holdings, LLC, its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

[signature page to Management Stockholder’s Agreement]

 

 

	
   

  	
  MANAGEMENT STOCKHOLDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
      Name: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDRESS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  o  The above-signed represents that he/she is
  an “accredited investor” as defined in Rule 501(a) of Regulation Dm
  as amended, under the Act.

  
	
   

  	
   

  
				

 

 

 

 

[signature page to Management Stockholder’s Agreement]

 

 

 

Schedule I

 

PURCHASED
STOCK

 

Number of
shares of Purchased Stock (up to             )
(to be purchased at the Base Price):

 

Base
Price: $5.00

 

Number of
restricted shares being applied towards purchase of Purchased Stock (up to             ):

 

___________

 

STATUS AS
SENIOR MANAGEMENT STOCKHOLDER

 

o  Yes     o  No

 

STATUS AS
EXECUTIVE MANAGEMENT STOCKHOLDER

 

o  Yes     o  NoExhibit
10.5

 

SALE
PARTICIPATION AGREEMENT

 

July 6, 2007

 

To:   The Person whose name is 

set forth on the signature page hereof

 

Dear Sir or Madam:

 

You have entered into an Exchange Agreement
with Buck Holdings, L.P., a Delaware limited partnership and the parent entity
of the Company (“Parent”), and/or a Management Stockholder’s Agreement,
dated as of the date hereof, among Dollar General Corporation, a Tennessee
corporation (the “Company”), Parent and you (the “Stockholder’s
Agreement”) relating to (i) Rollover Stock (as defined in the
Stockholder’s Agreement); (ii) Rollover Options (as defined in the
Stockholder’s Agreement); (iii) the purchase by you of Purchased Stock (as
defined in the Stockholder’s Agreement); and/or (iv) the grant by the
Company to you of new options (together with the Rollover Options, “Options”)
to purchase shares of common stock, par value $0.50 per share, of the Company (“Common
Stock”, which includes Rollover Stock and Purchased Stock).  Parent hereby agrees with you as follows,
effective as of the Closing Date (as defined in the Stockholder’s Agreement):

 

1.     (a)   In the event that at
any time on or after the Closing Date Parent or any of its Affiliates (as
defined in the Stockholder’s Agreement) proposes to sell directly for cash or
any other consideration any shares of Common Stock owned by Parent or any such
Affiliate, in any transaction other than a Public Offering (as defined in the
Stockholder’s Agreement) or a sale, directly or indirectly, to an Affiliate of
Parent, then, unless Parent is entitled to and does exercise the drag-along
rights pursuant to Paragraph 7 below and the Drag Transaction is consummated,
solely to the extent you are a Senior Management Stockholder (as defined in the
Stockholder’s Agreement) or the provisions hereof are otherwise applicable to
you pursuant to and in accordance with Section 10 of the Stockholder’s
Agreement or as a result of a decision by the Board (as defined in the
Stockholder’s Agreement), after consultation with the Chief Executive Officer,
Chief Operating Officer and Chief Financial Officer of the Company, to extend
the rights under this Section 1 to you, Parent will notify you or your
Management Stockholder’s Estate or Management Stockholder’s Trust (as such
terms are defined in the Stockholder’s Agreement, and collectively with you,
the “Management Stockholder Entities”), as the case may be, in writing
(a “Notice”) of such proposed sale (a “Proposed Sale”) specifying
the principal terms and conditions of the Proposed Sale (the “Material Terms”)
including (A) the amount of Common Stock to be included in the Proposed
Sale, (B) the percentage of the outstanding Common Stock at the time the
Notice is given that is represented by the number of shares to be included in
the Proposed Sale, (C) the price per share of Common Stock subject to the
Proposed Sale, including a description of any pricing formulae and of any
non-cash consideration sufficiently detailed to permit valuation thereof, (D) the
Tag Along Sale Percentage of Parent and (E) the name and address of the
Person (as defined in the Stockholder’s Agreement) to whom the offered Common
Stock is proposed to be issued.

 

 

(b)           If, within 10 business days
after the delivery of Notice under Section 1(a), Parent receives from a
Management Stockholder Entity a written request (a “Request”) to include
Common Stock held by the Management Stockholder Entity in the Proposed Sale
(which Request shall be irrevocable except (a) as set forth in clauses (c) and
(d) of this Section 1 below or (b) if otherwise mutually agreed
to in writing by the Management Stockholder Entity and Parent), the Common
Stock held by you (not in any event to exceed the Tag Along Sale Percentage
multiplied by the total number of shares of Common Stock held by the Management
Stockholder Entities in the aggregate) will be so included as provided
herein.  Promptly after the execution of
the Sale Agreement, Parent will furnish each Management Stockholder Entity with
a copy of the Sale Agreement, if any. 
For purposes of this Agreement, the “Tag Along Sale Percentage”
shall mean the fraction, expressed as a percentage, determined by dividing the
number of shares of Common Stock to be purchased from Parent by the total
number of shares of Common Stock owned directly or indirectly by Parent.

 

(c)           Notwithstanding anything to the
contrary contained in this Agreement, if any of the economic terms of the
Proposed Sale change, including without limitation if the per share price will
be less than the per share price disclosed in the Notice, or any of the other
principal terms or conditions will be materially less favorable to the selling
Management Stockholder Entities than those described in the Notice, Parent will
provide written notice thereof to each Management Stockholder Entity who has made
a Request and each such Management Stockholder Entity will then be given an
opportunity to withdraw the offer contained in such holder’s Request (by
providing prompt (and in any event within five (5) business days; provided
that, notwithstanding the foregoing, if the proposed closing with respect to
the Proposed Sale is to occur within five (5) business days or less, no
later than three (3) business days prior to such closing) written notice
of such withdrawal to Parent), whereupon such withdrawing Management
Stockholder Entity will be released from all obligations thereunder.

 

(d)           If Parent does not complete the
Proposed Sale by the end of the 120th day following the date of the
effectiveness of the Notice, each selling Management Stockholder Entity may elect
to be released from all obligations under the applicable Request by notifying
Parent in writing of its desire to so withdraw. 
Upon receipt of that withdrawal notice, the Notice of the relevant
Management Stockholder Entity shall be null and void, and it will then be
necessary for a separate Notice to be furnished, and the terms and provisions
of clauses (a) and (b) of this Section 1 separately complied
with, in order to consummate such Proposed Sale pursuant to this Section 1,
unless the failure to complete such proposed sale resulted from any failure by
any selling Management Stockholder Entity to comply with the terms of this Section 1.

 

2.     (a)   The number of shares
of Common Stock that you will be permitted to include in a Proposed Sale
pursuant to a Request will be the lesser of (A) the number of shares of
Common Stock that you have offered to sell in the Proposed Sale as set forth in
the Request and (B) the number of shares of Common Stock determined by
multiplying (i) the number of shares of Common Stock to be included in the
Proposed Sale by (ii) a fraction the numerator of which is the number of
shares of Common Stock owned by you plus all shares of Common Stock
which you are then entitled to acquire under any unexercised portion of
Options, to the extent such Option is then exercisable or would become
exercisable as a result of the consummation of the Proposed Sale and the
denominator of which is the total number of shares of Common Stock 

 

2

 

owned by the Management Stockholder Entities and all
other Persons participating in such sale as tag-along sellers pursuant to Other
Management Stockholder Agreements (as defined in the Stockholder’s Agreement)
or other agreements (all such participants, the “Tag Along Sellers”) plus
all shares of Common Stock which you and such Persons are then entitled to
acquire under any unexercised portion of Options, to the extent such Options
are then exercisable or would become exercisable as a result of the consummation
of the Proposed Sale, plus all shares of Common Stock owned by Parent.

 

(b)          If
one or more Tag Along Sellers elect not to include the maximum number of shares
of Common Stock which such holders would have been permitted to include in a
Proposed Sale pursuant to Paragraph 2(a) (such non-included shares, the “Eligible
Shares”), then each of Parent, or the remaining Tag Along Sellers, or any
of them, will have the right to sell in the Proposed Sale a number of
additional shares of their Common Stock equal to their pro rata portion of the
number of Eligible Shares, based on the relative number of shares of Common
Stock then held by each such holder plus all shares of Common Stock
which you are then entitled to acquire under any unexercised portion of the Option,
to the extent such Option is then exercisable or would become exercisable as a
result of the consummation of the Proposed Sale, and such additional shares of
Common Stock which any such holder or holders propose to sell shall not be
included in any calculation made pursuant to Paragraph 2(a) for the
purpose of determining the number of shares of Common Stock which the
Management Stockholder Entities will be permitted to include in a Proposed
Sale.  The Parent will have the right to
sell in the Proposed Sale additional shares of Common Stock owned by it equal
to the number, if any, of remaining Eligible Shares which will not be included
in the Proposed Sale pursuant to the foregoing.

 

3.     Except as may otherwise be provided herein, shares of Common
Stock subject to a Request will be included in a Proposed Sale pursuant hereto
and in any agreements with purchasers relating thereto on the same terms and
subject to the same conditions applicable to the shares of Common Stock which
Parent proposes to sell in the Proposed Sale. 
Such terms and conditions shall include, without limitation: the sale
price; the payment of fees, commissions and expenses; the provision of, and
customary representations and warranties as to, information reasonably
requested by Parent covering matters regarding the Management Stockholder
Entities’ ownership of shares; and the provision of requisite indemnification; provided
that any indemnification provided by the Management Stockholder Entities shall
be pro rata in proportion with the number of shares of Common Stock to be sold;
provided, further, that no Management Stockholder Entity shall be
required to indemnify any Person for an amount, in the aggregate, in excess of
the gross proceeds received in such Proposed Sale.  Notwithstanding anything to the contrary in
the foregoing, if the consideration payable for shares of Common Stock is
securities and the acquisition of such securities by a Management Stockholder
Entity would reasonably be expected to be prohibited under U.S., foreign or
state securities laws, such Management Stockholder Entity shall be entitled to
receive an amount in cash equal to the value of any such securities such Person
would otherwise be entitled to receive.

 

4.     Upon delivering a Request, the Management Stockholder Entities
will, if requested by Parent, execute and deliver a custody agreement and power
of attorney in form and substance reasonably satisfactory to Parent with
respect to the shares of Common Stock which are to be sold by the Management
Stockholder Entities pursuant hereto (a “Custody Agreement 

 

3

 

and Power of Attorney”).  The Custody Agreement and Power of Attorney
will contain customary provisions and will provide, among other things, that
the Management Stockholder Entities will deliver to and deposit in custody with
the custodian and attorney-in-fact named therein a certificate or certificates
(if such shares are certificated) representing such shares of Common Stock
(duly endorsed in blank by the registered owner or owners thereof) and
irrevocably appoint said custodian and attorney-in-fact as the Management
Stockholder Entities’ agent and attorney-in-fact with full power and authority
to act under the Custody Agreement and Power of Attorney on the Management
Stockholder Entities’ behalf with respect to the matters specified therein.

 

5.     Your right pursuant hereto to participate in a Proposed Sale
shall be contingent on your material compliance with each of the provisions
hereof and your willingness to execute such documents in connection therewith
as may be reasonably requested by Parent.

 

6.     If the consideration to be paid in exchange for shares of Common
Stock in a Proposed Sale pursuant to Section 1 includes any securities,
and the receipt thereof by Parent and a Management Shareholder Entity would
require under applicable law (a) the registration or qualification of such
securities or of any Person as a broker or dealer or agent with respect to such
securities or (b) the provision to any selling Management Shareholder
Entity of any information regarding the Company, its subsidiaries, such
securities or the issuer thereof that would not be required to be delivered in
an offering solely to a limited number of “accredited investors” under
Regulation D promulgated under the Securities Act of 1933, as amended, and the rules and
regulations in effect thereunder, Parent and such Management Shareholder Entity
shall not, subject to the following sentence, have the right to sell shares of
Common Stock in such proposed sale.  In
such event, Parent shall have the right to cause to be paid to such selling
Management Shareholder Entity in lieu thereof, against surrender of the shares
of Common Stock which would have otherwise been sold by such selling Management
Shareholder Entity to the prospective buyer in the proposed sale, an amount in
cash equal to the Fair Market Value (as defined in the Stockholder’s Agreement)
of such shares of Common Stock as of the date such securities would have been
issued in exchange for such shares of Common Stock.

 

7.     (a)  If Parent or any of its Affiliates that directly owns
shares of Common Stock proposes to transfer, directly or indirectly, a number
of shares of Common Stock equal to 50% or more of the outstanding Common Stock
(such Person, the “Drag-Along Purchaser”), then if requested by Parent,
the Management Stockholder Entities shall be required to sell a number of
shares of Common Stock equal to the aggregate number of shares of Common Stock
held by the Management Stockholder Entities (including shares of Common Stock
underlying exercisable Options) multiplied by the Tag Along Sale Percentage
(such transaction, a “Drag Transaction”).

 

(b)           Shares
of Common Stock held by the Management Stockholder Entities included in a Drag
Transaction will be included in any agreements with the Drag-Along Purchaser
relating thereto on the same terms and subject to the same conditions
applicable to the shares of Common Stock which Parent proposes to sell in the
Drag Transaction.  Such terms and conditions
shall include, without limitation:  the
pro rata reduction of the number of shares of Common Stock to be sold by Parent
and the Management Stockholder Entities to be included in the Drag Transaction
if required by the Drag-Along Purchaser; the sale price; the payment of 

 

4

 

fees, commissions and expenses; the provision of, and representation
and warranty as to, information reasonably requested by Parent covering matters
regarding the Management Stockholder Entities’ ownership of shares; and the
provision of requisite indemnification; provided that any
indemnification provided by the Management Stockholder Entities shall be pro
rata in proportion with the number of shares of Common Stock to be sold; provided,
further, that no Management Stockholder Entity shall be required to
indemnify any Person for an amount, in the aggregate, in excess of the gross
proceeds received in such Proposed Sale.

 

(c)           Your
pro rata share of any amount to be paid pursuant to Paragraph 3 or 7(b) shall
be based upon the number of shares of Common Stock intended to be transferred
by the Management Stockholder Entities plus the number of shares of Common
Stock you would have the right to acquire under any unexercised portion of the
Option which is then vested or would become vested as a result of the Proposed
Sale or Drag Transaction, assuming that you receive a payment in respect of
such Option.

 

(d)           Notwithstanding
anything to the contrary in the foregoing, if the consideration payable for
shares of Common Stock is securities and the acquisition of such securities by
a Management Stockholder Entity would reasonably be expected to be prohibited
under U.S., foreign or state securities laws, such Management Stockholder
Entity shall be entitled to receive an amount in cash equal to the value of any
such securities such Person would otherwise be entitled to receive.

 

8.     The obligations of Parent hereunder shall extend only to you and
your transferees (“Permitted Transferees”) who (a) are Other
Management Stockholders (as defined in the Stockholder’s Agreement), (b) are
party to a Management Stockholder’s Agreement with the Company and (c) have
acquired Common Stock pursuant to a Permitted Transfer (as defined in the
Stockholder’s Agreement), and none of the Management Stockholder Entities’
successors or assigns, with the exception of any Permitted Transferee and only
with respect to the Common Stock acquired by such Permitted Transferee pursuant
to a Permitted Transfer, shall have any rights pursuant hereto.

 

9.     This Agreement shall terminate and be of no further force and
effect on the occurrence of the earlier of the consummation of a Qualified
Public Offering (as defined in the Stockholder’s Agreement) or a Change in
Control (as defined in the Stockholder’s Agreement).

 

10.   All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when
sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five (5) days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid or (d) one (1) business day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt.  All
communications shall be sent to such party’s address as set forth below or at
such other address or to such other person as the party shall have furnished to
each other party in writing in accordance with this provision:

 

5

 

If to Parent, at the following address:

 

KKR 2006 Fund, L.P.

2800 Sand Hill Road

Menlo Park, CA 94025

Attention: 
Michael Calbert

Telecopy: 
(650) 233-6553

 

with a copy to:

 

Simpson Thacher &
Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: David J. Sorkin, Esq.

Marni J. Lerner, Esq.

Telecopy: (212) 455-2502

 

If to the Company,
to the Company at the following address:

 

Dollar General Corporation

100 Mission Ridge

Goodlettsville, TN  37202

Attention:  General Counsel.

Telecopy:  (615) 855-5180

 

with a copy to:

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: David J. Sorkin, Esq.

Marni J. Lerner, Esq.

Telecopy: (212) 455-2502

 

If to you, to you at the address first set
forth above herein;

 

If to your Management Stockholder’s Estate or
Management Stockholder’s Trust, to the address provided to the Company by such
entity.

 

11.   The laws of the State of Delaware shall
govern the interpretation, validity and performance of the terms of this
Agreement.  In the event of any
controversy among the parties hereto arising out of, or relating to, this
Agreement which cannot be settled amicably by the parties, such controversy
shall be finally, exclusively and conclusively settled by mandatory arbitration
conducted expeditiously in accordance with the American Arbitration Association
rules, by a single independent arbitrator. 
Such arbitration process shall take place in Nashville, Tennessee.  The decision of the arbitrator shall be final
and binding upon all parties hereto and shall be rendered pursuant to a written
decision, which contains a detailed recital of the arbitrator’s reasoning.  Judgment upon the award rendered may be
entered in any court having 

 

6

 

jurisdiction thereof. 
Each party shall bear its own legal fees and expenses, unless otherwise
determined by the arbitrator; provided that if the Management Stockholder
substantially prevails on any of his or her substantive legal claims, then the
Investors shall reimburse all legal fees and arbitration fees incurred by the
Management Stockholder to arbitrate the dispute.  Each party hereto hereby irrevocably waives
any right that it may have had to bring an action in any court, domestic or
foreign, or before any similar domestic or foreign authority with respect to
this Agreement.

 

12.   This Agreement may be executed in counterparts,
and by different parties on separate counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument.

 

13.   It is the understanding of the undersigned
that you are aware that no Proposed Sale is contemplated and that such a sale
may never occur.

 

14.   This Agreement may be amended by Parent at
any time upon notice to the Management Stockholder thereof; provided
that any amendment (i) that materially disadvantages the Management Stockholder
shall not be effective unless and until the Management Stockholder has
consented thereto in writing and (ii) that disadvantages a class of
stockholders in more than a de minimis way but less than a material way shall
require the consent of a majority of the equity interests held by such affected
class of stockholders.

 

15.   Capitalized terms used by not defined herein
shall have the meaning ascribed to such terms in the Stockholder’s Agreement.

 

[Signatures on following pages]

 

7

 

If the
foregoing accurately sets forth our agreement, please acknowledge your
acceptance thereof in the space provided below for that purpose.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  BUCK HOLDINGS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BUCK HOLDINGS, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

[signature page to Sale Participation Agreement]

 

 

 

 

Accepted and agreed this           
day of

 

                          
2007.

 

 

	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
			

 

[signature page to Sale Participation Agreement]

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