Exhibit B
DOLLAR GENERAL CORPORATION
1995 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
1. Purpose
The purposes of the Plan are to advance the interests of the
Company and its shareholders by attracting and retaining the
highest quality of experienced persons as Outside Directors and to
align the interests of the Outside Directors more closely with the
interests of the Company's shareholders.
2. Definitions
For purposes of the Plan, the following terms shall have the
meanings indicated below:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto.
(c) "Committee" shall mean the members of the Board not
eligible to participate in the Plan.
(d) "Company" shall mean Dollar General Corporation, a
corporation organized under the laws of the State of
Kentucky, or any successor corporation.
(e) "Disability" means permanent and total disability within
the meaning of Section 22(e)(3) of the Code, as
determined by the Committee.
(f) "Exercise Date" shall mean the date on which the Company
receives the notice of exercise of an Option from an
Optionee as set forth in Section 7(d).
(g) "Fair Market Value" means the reported closing price of
the Stock on the New York Stock Exchange, or such other
exchange or over the counter market on or through which
the Stock trades on the relevant date or, if no shares of
Stock are traded on that date, the reported closing price
on the next preceding date on which shares were traded.
In the event that trading in the shares of Stock is no
longer reported on the New York Stock Exchange, or such
other exchange or market, Fair Market Value shall be
determined by such other method
2
as the Committee in good faith deems appropriate without
regard to any restriction other than a restriction which,
by its terms, will never lapse.
(h) "Option" shall mean an option granted to an Outside
Director pursuant to the Plan.
(i) "Optionee" shall mean an Outside Director who has been
granted an Option pursuant to the Plan.
(j) "Outside Director" shall mean any member of the Board who
has not served as an employee of the Company at any time
during the two-year period preceding the date on which an
Option is granted to such Optionee.
(k) "Plan" shall mean the 1995 Stock Option Plan for Outside
Directors.
(l) "Stock" shall mean the Common Stock, $.50 par value, of
the Company.
3. Administration
The Plan shall be administered by the Committee. The
Committee is authorized to interpret the Plan and may from time to
time adopt such rules and regulations, not inconsistent with the
provisions of the Plan, as it may deem advisable to carry out the
Plan; provided, however, that the Committee shall have no
discretion with respect to designating the recipient of an Option,
the number of shares of Stock that are subject to an Option or the
per share exercise price for an Option. All decisions made by the
Committee in construing the provisions of the Plan shall be final.
4. Eligibility
Each Outside Director shall be eligible to participate under
the Plan.
5. Stock Subject to the Plan
Subject to adjustment as provided in Paragraph 9, not more
than 450,000 shares of Stock may be issued with respect to the
Options granted under the Plan. Such shares that are reserved for
issuance under the Plan are authorized but unissued shares of
Stock. Shares of Stock subject to an Option shall, upon the
expiration or termination of any such Option to the extent
unexercised, again be available for grant under the Plan.
3
6. Grant of Options
Options will be awarded under this Plan pursuant to the
following formula: Each Outside Director shall receive an annual
Option for the purchase of Stock determined by dividing (i) the
annual retainer for an Outside Director (determined with reference
to the rate of annual retainer in effect on the date the Options
are granted) by (ii) the Fair Market Value of a share of Stock on
the date of the Option grant, multiplying the result (the quotient)
by three, rounding the resulting number of shares up to the nearest
whole share. In the event an Outside Director serves as Chairman
of the Board, the multiplier in the preceding sentence shall be
four in lieu of three. The exercise price of each Option granted
under this Plan shall be the Fair Market Value on the date of
grant.
7. Terms and Conditions of Options
(a) Term
Options shall vest on the first anniversary of the date
of grant and shall be exercisable in whole or part at any
time upon fulfillment of the vesting period. In no event
may an Option be exercisable:
(i) Until the Optionee shall have completed at
least one year of continued service as a director of the
Company after the date such Option is granted; or
(ii) For more than ten years from the date of grant.
Whether an authorized leave of absence shall constitute
termination of service as a director shall be determined
by the Committee. In the event of the death or
Disability of an Optionee during his service as a
director, all his unexercised Options shall immediately
become exercisable and may be exercised (by his personal
representative in the event of such death) for a period
of three years following the date of such death or one
year following the date of such Disability, but in no
event after the respective expiration dates of such
Options. In the event of the termination of an
Optionee's service as a director for cause, any Options
held by him under the Plan not theretofore exercised
shall terminate immediately upon such termination of
service as a director and may not be exercised
thereafter. The Committee in its sole discretion may
determine that an Optionee's service as a director was
terminated for cause, if it finds that the Optionee
willfully violated any of the Company's policies on
ethical business conduct or engaged in any activity or
conduct during his service as a director
4
which was inimical to the best interests of the Company.
If an Optionee's service as a director is terminated for
any reason other than by his death or Disability or by
the Company for cause, his Options, to the extent then
exercisable, may be exercised within one year immediately
following the date of termination, but in no event after
the respective expiration dates of such Options.
(b) Exercise of Options
An Option shall be exercised by delivering to the
Corporate Secretary of the Company a written notice of
exercise in the form prescribed by the Corporate
Secretary for use from time to time. Such notice of
exercise shall indicate the number of shares for which
the Option is to be exercised and shall be accompanied by
the full exercise price for the portion of the Option to
be exercised.
(c) Form of Payment
The exercise price may be paid in cash (including
certified or cashier's check, bank draft or money order),
Stock which is free and clear of all liens, claims or
other encumbrances by third parties, or a combination of
Stock and cash. The Stock so delivered shall be valued at
the Fair Market Value as of the Exercise Date. No shares
of Stock shall be issued or delivered until full payment
therefor has been made.
(d) Non-Transferability
No Option shall be assignable or transferable by the
Optionee, except by will or pursuant to applicable laws
of descent and distribution. During the life of an
Optionee, an Option shall be exercisable only by such
Optionee or such Optionee's legal representative.
5
(e) No Rights as Shareholders
Neither an Optionee nor an Optionee's legal
representative shall have any rights as shareholders of
the Stock unless and until certificates for shares of
Stock are registered in his or her name in satisfaction
of a duly exercised Option.
8. Withholding Taxes
Whenever the Company grants, issues or transfers shares of
Stock under the Plan, the Company shall have the right to require
the Optionee to remit to the Company an amount sufficient to
satisfy any federal, state and local withholding tax requirements
prior to the delivery of any certificate for such shares. The
Company shall have the right to retain sufficient shares of Stock
to cover the amount of any tax required by any government to be
withheld or otherwise deducted or paid with respect to the exercise
of the Options. The Stock so retained shall be valued at the Fair
Market Value as of the date of such retention.
9. Capital Adjustments and Corporate Reorganizations
In the event of any change in the outstanding shares of Stock
by reason of a stock dividend, split or combination, or
recapitalization or reclassification, or reorganization, merger or
consolidation, in which the Company is the surviving corporation or
other similar change affecting the Stock, the number of shares then
subject to Options and for which Options may thereafter be granted
and the price per share of Stock payable upon exercise or surrender
of such Options shall be appropriately adjusted by the Committee to
reflect such change. No fractional shares shall be issued as a
result of such adjustment. In the event of a dissolution of the
Company or a reorganization, merger or consolidation in which the
Company is not the surviving corporation, the Company by action of
its Board shall either (i) terminate outstanding and unexercised
Options as of the effective date of such dissolution, merger or
consolidation by giving notice to each Optionee of its intention to
do so and permitting the exercise, during the period prior to such
effective date to be specified by the Committee, of all outstanding
and unexercised Options or portions thereof; provided, however,
that no Option shall become exercisable hereunder either after the
expiration date thereof or prior to six (6) months from the date of
grant thereof, or (ii) in the case of such reorganization, merger
or consolidation, arrange for an appropriate substitution of shares
or other securities of the corporation with which the Company is
reorganized, merged or consolidated in lieu of the shares which are
subject to any outstanding and unexercised Options.
10. Effective Date and Term of the Plan
The Plan shall be effective as of March 27, 1995. Subject to
Section 11 hereof, the Board in its discretion may terminate the
Plan at any time with respect to any shares for which Options have
not theretofore been granted. Except with respect to Options then
outstanding, if not sooner forfeited or terminated, the Plan shall
terminate upon, and no further Options shall be granted after March
26, 2005.
6
11. Amendments
The Board shall have the right to alter or amend the Plan or
any part thereof from time to time provided that:
(a) no change in any Option theretofore granted may be made
which would impair the rights of an Optionee without the
consent of such Optionee;
(b) Plan provisions may not be amended more than once every
(6) six months, other than to comport with changes in the
Code, the Employee Retirement Income Security Act, or the
rules thereunder; and
(c) the Board may not make any alteration or amendment which
would materially increase the benefits accruing to
participants under the Plan, increase the aggregate
number of shares of Stock which may be issued pursuant to
provisions of the Plan or extend the terms of the Plan,
without the approval of the shareholders of the Company.