Dollar General 2008 Annual Report Download - page 173

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loan facility. The amount of principal outstanding under this term loan facility at all times
during fiscal 2008 and as of March 17, 2009 was $2.3 billion, and we paid no principal and
approximately $133.4 million of interest during fiscal 2008. We paid $200,000 to Citicorp North
America, Inc. for its services relating to this facility. For additional information regarding the
senior secured term loan facility, see the discussion under the heading “Credit Facilities” in the
Liquidity and Capital Resources portion of Management’ s Discussion and Analysis of Financial
Condition and Results of Operations in Item 7 above.
Goldman, Sachs & Co. is a counterparty to an amortizing interest rate swap totaling
$433.3 million as of January 30, 2009, entered into in connection with such senior secured term
loan facility. See Item 7A “Quantitative and Qualitative Disclosures About Market Risk” for
information regarding such interest rate swap. We paid Goldman, Sachs & Co. approximately
$9.5 million in fiscal 2008 pursuant to the interest rate swap.
Our Board members Mr. Calbert and Mr. Agrawal and our former Board member Mr.
Nelson serve as a Member, a Director and a Partner of KKR, respectively, while our Board
member Mr. Jones serves as a Managing Director of Goldman, Sachs & Co. KKR indirectly
owns approximately 52% of our common stock. Goldman, Sachs & Co. is an affiliate of GS
Capital Partners VI Fund, L.P. and affiliated funds. GS Capital Partners VI Fund, L.P. and
affiliated funds indirectly own approximately 22% of our common stock. Citicorp North
America Inc. is an affiliate of Citigroup Private Equity LP. Funds managed by Citigroup Private
Equity LP indirectly own approximately 7% of our common stock.
We use Capstone Consulting, LLC, a team of executives who work exclusively with
KKR portfolio companies providing certain consulting services. We pay Capstone a monthly fee,
currently $210,000, plus expense reimbursements. During fiscal 2008, the aggregate fees and
expenses we incurred for Capstone’ s services totaled approximately $3 million. Our former
Board member Mr. Nelson is the Chief Executive Officer of Capstone. Although neither KKR
nor any entity affiliated with KKR owns any of the equity of Capstone, KKR had provided
financing to Capstone prior to January 1, 2007.
(c) Related Party Transaction Approval Policy. On August 28, 2008, our Board
adopted a written policy for the review, approval or ratification of “related party” transactions.
For purposes of this policy, a “related party” includes our directors, executive officers, and
greater than 5% shareholders, as well as their immediate family members, and a “transaction”
includes one in which (1) the total amount may exceed $100,000, (2) Dollar General is a
participant, and (3) a related party will have a direct or indirect material interest (other than as a
director or a less than 10% owner of another entity, or both).
Pursuant to this policy and subject to certain exceptions, all known related party
transactions require prior Board approval. In addition, at least annually after receiving a list of
immediate family members and affiliates from our directors, executive officers and over 5%
shareholders, the Corporate Secretary will coordinate with relevant internal departments to
determine whether any transactions were unknowingly entered into with a related party and will
present a list of such transactions to the Board for review.